Neoliberalism has dominated economic thinking in the UK and across the Anglosphere for over 40 years. But what do we have to show for it? Rising poverty, broken housing markets, stagnant wages, failing pensions, and growing inequality. In this video, I explain why neoliberalism was never meant to deliver for ordinary people — and why it's time to build something better.
This is the transcript:
If neoliberalism is so good, why is the world falling apart?
That's the question I want to unpack in this video.
We have, after all, now had 40 years of neoliberal policy right across the Anglosphere, and the social fabric of almost every English-speaking country in the world is disintegrating before our eyes.
In the UK, we've got more than 4 million children living in poverty.
That's after 40 years of trickle-down promises, and this is not a blip. It's the result of deliberate economic policy. How can that be defined as a success?
We've also got millions of people living in inadequate or insecure housing, whilst first-time buyers face a hopeless future. The young are being consigned to history. House prices are outstripping wages year after year, and there is not a hope of this being corrected at present, and so we have a clear market failure.
We have vast numbers of young people who also face a future without opportunity. They are presented with precarious jobs, student debt, zero-hours contracts, and their social mobility has collapsed. More than ever, now, how you get on in life is dependent upon who your parents are and not what your ability is. Neoliberalism promised meritocracy, but it's delivered exclusion.
In addition, Labour has admitted UK pensions are now failing us. Twenty years after they started an experiment to force people to take private sector pensions to supplement the state old age pension, they're now admitting that by 2050, pensioners will be worse off than they are now. That is a catastrophe, and it's entirely down to the fact that they believe in markets, which do not work. That's not planning for dignity, that's planning for abandonment.
Meanwhile, the rich have never had it so good. While the rest of us face stagnation, insecurity and precarity, they are enjoying all the advantages of growing inequality, which is a feature of neoliberal design. Redistribution upwards is what the whole of that system is about.
And internationally, this is also true. We're suffering in the UK, but so is the USA, so is Australia, and so is New Zealand. In all of those countries, the fact is that the young are despairing.
Access to housing is becoming more difficult. And this is even true in countries inside the EU. For example, Ireland has the worst chance of any country in the Anglosphere of a person now getting access to housing.
We have lower life expectancy, more mental illness, and less trust than countries which have not followed the neoliberal Anglo-Saxon model.
This is not a model of success.
Neoliberalism is not working.
It never did.
It was designed not to.
It promised freedom, but it delivered insecurity, by choice.
It promised wealth, but it's delivered hoarding and inequality, by choice.
It promised efficiency, but it's created economic crisis.
We need an economy that works for people and our planet.
That means care, sustainability, equality, and dignity.
That's the economics I talk about on this channel, and that's what we must now demand.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Empirically it is not working.
Empirically it could never work (= uptopian project – such projects cannot work).
To get change people need to start asking very hard questions to politicos – their MPs.
Such MPs will balther & bullshit – but if enough people ask the right questions – the MPs will realise that the game is up.
This is how it looks when – “the game is up”:
https://www.youtube.com/watch?v=ClxJXLl82eY&list=RDClxJXLl82eY&start_radio=1
(& if you were wondering who was the child giving the loyal address to the King in the puouring rain… it was Robespierre – really happened).
“It really happened” is problematic. As I understand it, the event is recounted in one place, the biography of Robespierre by Abbé Proyart. He was a Catholic, monarchist, counter-revolutionary, and the biography is not sympathetic of Robespierre. The event is not mentioned in the similarly contemporaneous biography by Robespierre’s sister or other sources.
More importantly, there is no other record of the Louis XVI visiting Paris in 1775, on his journey to Rheims for his coronation in June or the return trip, or otherwise. Or indeed any evidence for a so-called “tradition” of a boy from Robespierre’s school delivering an address to the king in Latin. The previous French coronation was in 1722, and before that in 1654.
So it could potentially have happened. But it is unlikely. Sorry.
The twin of neoliberalism is private sector debt. Both contribute to the ills of society. And both derive from the policy of fixing every financial crisis by credit expansion, courtesy of Dr Alan Greenspan, October 1987. In the first few years of neoliberalism pre-Greenspan, credit expansion happened automatically as the previous negative real interest rates turned into positive real interest rates, because the first effect of that change was to compound credit.
Now we face the risk of a much nastier stock market crash. Instead of twelve automated dealing systems selling together on a piece of bad news, there may be tens of thousands such systems all exhibiting herd instinct.
What will the authorities do then? My guess is that they will once again open the credit floodgates wide, thereby buying a short reprieve and a much nastier private sector debt problem later. This is how neoliberalism, private sector debt, monetary policy and markets all fit together. It isn’t pretty, and opening the credit floodgates wide will be the worst possible policy response. Better to face the fact that the system of debit and credit invented by the 13th century Italian bankers is reaching end of life. Unfortunately, regulation makes it harder for an alternative to evolve.
At least the greedier elements of society will have something serious to worry about. But politicians will have to face the need to cancel debits and credits to restore balance to society. Or allow banks and businesses to go bust. Which is why we need one person one vote, not one pound one vote, and desperately need to allow citizens to put topics onto a democratic agenda.
Sorry to be a tad gloomy, but I’ve just come from a meeting where a high-rolling trader was trying to argue that he could outwit such forces. Fine chance he has.
Much to agree with, and I wish there was not.
Neoliberalism is more than just the failure of our economy. It is an ideology that is anti-democratic, and seeks to increase the wealth of a select few.
I urge people to read more about its history and aims.
See YouTube, in particular the videos by George Manbiot.
https://www.youtube.com/results?search_query=neoliberalism+monbiot
I would say that Neo-liberalism is working because radical change/destruction is its goal to be honest, so that assets can be hoovered up by the rich and their spare cash.
Neo-liberalism is the nothing more that the dreams of the rich superimposed on the rest of society who are co-opted into it without realising that they have been duped because they cannot never win – it’s a big con, a trap from which they will come off worst.
I would agree except rather than radical change/destruction the aim is to restore the old order, what they would see as the ‘natural order’ and whilst yes, it’s certainly working for them, it was supposed to work for everyone to some extent, at least, that’s how it was sold, and it doesn’t work for most of us.
“There was nothing which it was not our duty to sacrifice to this Moloch and Mammon in one; for we faithfully believed that the worship of these monsters would overcome the evil of poverty and lead the next generation safely and comfortably, on the back of compound interest, into economic peace. To-day we suffer disillusion, not because we are poorer than we were-on the contrary even to-day we enjoy, in Great Britain at least, a higher standard of life than at any previous period, but because other values seem to have been sacrificed and because they seem to have been sacrificed unnecessarily, inasmuch as our economic system is not, in fact, enabling us to exploit to the utmost the possibilities for economic wealth afforded by the progress of our technique, but falls far short of this, leading us to feel that we might as well have used up the margin in more satisfying ways.”
J. M. Keynes 1933
Now the rich are a lot better off, those of us in the middle do probably have a better standard of living, if less security, than in the past, those near the bottom may be worse off and certainly are massively less economically secure, and we’re told values have to be sacrificed we can’t do things we used to do like provide as much foreign aid, or pay the disabled as much and can’t afford future pensions.
And one can also draw parallels with the 19thC where they
“carried to extravagant lengths the criterion of what one can call for short ‘the financial results’, as a test of the advisability of any course of action sponsored by private or by collective action. The whole conduct of life was made into a sort of parody of an accountant’s night-mare.”
Like Snake Oil salesman, if they get found out, then they just change the label and start selling it again and the people are duped again.
Thank you.
Interesting refrence to compound interest.
To clarify – when I say ‘radical’ I mean in the sense of hurried, drastic, extreme – not the other connotation of something new.
Good post by the way……………………
Excellent Richard, and why I follow you. But do you not feel that most of the time you are preaching to the converted? I know from my experience of talking to friends that I am wasting my time….BUT, we must never give up.
This is why I am on Twitter, Facebook, LinkedIn and of course YouTube. Comments suggest I reach thsoe who do not agree.
And let’s be clear, not everyone here agrees with me.
I was listening to LBC James O’brien this morning talking about how the govt has invited some social media influencers to Downing St because it wants to help get its messages across more effectively!
Oh dear I thought here we go again. Its all about messaging not actually what you are fucking doing. Forgive my language.
Maybe Starmer will emulate Trump’s truth platform? Maybe some influencers will be seduced by getting in with the establishment and a chance to make more revenue from their channel(s)?
Fleet street/Broadcast type media captured the old ie the 40+ long ago but they have not yet got a grip on those younger who consume entertainment/news/influence in new very different ways.
Richard did you receive a Downing St Invite?
I think Gary Stevenson did from what was said on LBC.
I think Gary probably fits the influencer model they’ve got.
I have not been to No.10 since 2010.
And there was certainly no invitation this time.
‘Meanwhile, the rich have never had it so good’
That’s because a) it was designed for just that purpose and b) the rich and powerful despise the weak and poor as shown most graphically by the Eton degenerates burning £20 – or was it £50? – notes in front of the homeless. The whole sordid tale is best told in ‘Austerity: the demolition of the Welfare State and the Rise of the Zombie Economy’ by Kelly-Anne Mendoza, which along with Kelton’s ‘Deficit Myth’ and Richard’s entire output should be compulsory reading for anyone aspiring to become an MP, PM, economist or political correspondent.
There’s an excellent piece by Mani Basharzad recently which includes gems of data such as:
“Since 2000, the presence of state-owned enterprises (SOEs) in the world’s 2,000 largest firms has doubled. These state-linked giants now control assets worth an astonishing $45 trillion—more than 13 times the size of the UK’s GDP and nearly half of global GDP (IMF, 2020). The number of SOEs in the Fortune Global 500 has quadrupled, rising from 32 in 2000 to 132 in 2021 ”
“Today, over 900 development banks exist globally, controlling more than $49 trillion in assets (Marois, 2021).”
“The number of sovereign wealth funds (SWFs) has increased sixfold in the past two decades – the total assets controlled by SWFs have ballooned from under $1 trillion in 2000 to $11.8 trillion in 2023—more than the total held by hedge funds and private equity firms combined”
Economics pundits are asking us to rethink capitalism but you have to ask them “Where is the capitalism you want us to rethink?”
The apostles of neoliberalism (the IEA and all the other apologists) will, if challenged that it isn’t working, claim that’s because it hasn’t been allowed to operate unchecked. The treatment has to continue despite all the empirical evidence showing that it’s killing the patient…
This is exactly the same argument used by the more unhinged die-hard supporters of Brexit. It is not working, not because of inherent problems with the political position itself, but because we don’t have a proper “burn the bridges” Brexit. Morale will eventually improve if we just beat the workers harder.
This failure to accept contrary evidence and change view is evidence that both positions are ideological and dogmatic. It doesn’t matter if they are demonstrably wrong because for some they are articles of faith and belief.
I can’t recall when you did it last, Richard, but might it be worth doing something again on the foundational assumptions of neoliberalism and why they are false.
I have a series sketched out…
The purpose of a system can be seen in its outcome, not its stated intent. Inequality was the intent all along. The rise of neoliberalism was not called the revolution of the rich for nothing.
So well described, thanks Prof.
Neoliberalism is socialism for the rich.
Funded and pushed by the rich to increase their wealth and power, now a stepping stone to fascism.
Despite what they say its ideology loves and supports big government, just not the type that helps ordinary people, more like like the big oppressive government of Pinochet’s military dictatorship of Chile- as the chief neoliberal architect Milton Friedman said ‘the miracle of Chile’.
Demos Kratos,
Good comment.
Milton Freidman is often quoted re Pinochet’s Chile.
It seems to me the classic mistake experts like Milton can fall into when they get to a certain level of fame and their opinions are increasingly sought on subjects outside their core expertise.
They increasingly appear to be just like the rest of us, fallible after all.
Neoliberal economics is just the revamping of Britain’s laissez faire and America’s guilded age, but this time on steroids.
It is a moral free and purposefully unjust system that benefits the wealthy over the rest of us, and particularly the poorest who are being in many cases driven to destitution. I’d say that those who are backing it are the wealthy who do not give a damn about anyone else. As a practising Christian I think that our politics, economics and social structures are now bordering on evil and amoral. I thought it couldn’t get any worse than under the last Tories. I think it will get much worse before it might get better.
I believe that every decent and honest citizen should challenge this as best we can and that starts with getting these blogs to as many people as possible. The Tories austerity over about 10 years from 2010 saw off about 350,000 people. I call that genocide.
I believe to make strong economies for the majority money needs to flow around at all levels of society not just hogged by the rich and stuffed in tax havens.
It’s obvious that the economy is not working for the majority and yet we live in a very wealthy country and the rich are getting richer.
Most of those rich and powerful claim to be Christians. But to them it’s just another club to help maintain their social position. They live far away from basic Christian principles. But then so do many in the clergy. When did you last hear of a sermon on Matthew 19.16? (rich man, camels, needles). A wise clergyman stays well away from such dangerous ground – for the sake of THEIR social position.
Yes, I’m well aware of the fake Christianity and fake piety of the ‘great and good’ and how faith itself is into their charlatanism and the sh*tshow of pretty much everything these days in the UK. The myriad scandals, abuses and cover ups by the upper echelons of the CofE might be something worth looking at. I think of most of those in power, particularly those professing some kind of vague faith, as the modern day Pharisees, hypocrites to the core making good into bad and bad into good whilst intoning platitudes.