For over 45 years, neoliberal and neoclassical economics have dominated UK policy — and failed us. These models rest on absurd assumptions about human behaviour, markets, and government. In this new series, I will dismantle their false logic, explain why they fail, and show how you can argue back with reason and evidence. Economics should serve people, not markets. Let's take it back.
The audio version can be found via this link.
This is the transcript:
Neoliberalism is complete and utter rubbish.
So, come to that, is neoclassical economics complete and utter rubbish.
But between them, they have dominated economic thinking in the UK for a century or longer, with neoliberalism being the curse of the last 45 years.
Both these models are built on absurd assumptions about human behaviour, how the world works, what we know, how we know it, and a great many other things.
All of which, when you stand back and look at them, are completely ludicrous. And so, because people have to face the reality of arguing with people who deal with neoliberalism, and promote it, and believe in it, we are going to make a series on the assumptions that underpin both neoliberalism and neoclassical economics, pointing out what's wrong with what they think, and how you can argue with a neoliberal, and win.
We are going to dismantle the whole rotten foundation of their economics, and that's important, because bad economic ideas produce bad outcomes, including inequality, austerity, and economic instability, and those are bad for you.
These outcomes are all the natural results of neoclassical and neoliberal models, which are biased heavily towards the wealthy. And if we don't challenge the assumptions within those models, we will never change the system.
So this series is going to be about challenging those assumptions, either one by one or sometimes in small groups where those assumptions are linked together.
Let's just talk about some of the assumptions we're going to take on. Let's start at the very beginning. Those models of the economy assume that people are rational, selfish, and perfectly informed. They know everything about the choices they're going to make, all of which is complete and utter tosh, which is a word I don't use very often, but one I've chosen because YouTube won't take offence at it. I could have chosen something else, which they might have done.
We're also going to talk about the fact that neoclassical and neoliberal economics assume that markets are efficient and they tend towards something called equilibrium, which is a stable state where everything is near enough perfect, but that has never happened in human history.
They also declare that governments are bad and the private sector is always better, which is precisely why we're in the mess we are, because, in fact, in our economy at present, we've got too little government, that is led by people who pretend that everything they do is going to be ineffective, and a private sector that is utterly clueless as to what to do within the economy and has no reason to invest because frankly, it can't think how to make anything else to flog to us. This idea, that governments are bad and the private sector is always good, is just wrong.
And then there's the international dimension. For example, that we should have free trade without any restrictions, and even worse, free capital flow, meaning that money can go and hide in tax havens at liberty, and that we should always have low taxes because they're always better for a society.
Really? That's what they say. But is there any evidence to support that? No, of course there isn't.
These are arguments by people who wish to support powerful institutions that protect inequality and harm the environment.
They belong in a fantasy world of perfect competition and no uncertainty, and they can't explain real-world crises or prevent them, but they still dominate public debate and policy.
So we are going to take their assumptions apart, and I stress really take them apart so you can see where those assumptions came from, what they mean, why they're wrong, why there are better alternatives, and most importantly, how we can build something better.
So we'll explain that the rational economic agent who underpins the whole idea of macroeconomics and how we manage the country's economy as a whole doesn't exist.
We'll explain why markets don't and can't reach equilibrium.
And why the idea that profit maximisation does produce optimal outcomes for business is just wrong.
Most importantly, we'll explain the fact that governments should intervene when neoliberalism says they should not.
This, then, is about analysing. But more than that, it's about arming you to argue. It's how to spot bad economic logic in the people you meet, in the media, in politics, and it's how to respond with reason, evidence, and confidence.
So each of these videos will have a transcript, and we might well put those together at the end of the day in some form of booklet to download. It will all be free, of course, because that's always the way on this channel.
But what we're really trying to do is reclaim economic debate. The fact is, economics should serve society and not the other way round.
People and not markets should come first.
Fairness, sustainability, and democracy are the things that we should be prioritising, and we should be describing these as economic goals, too, and the consequence is a very different economic model.
So look out for these videos. When you see them, please subscribe to them, share them, and join the debate because neoliberalism is total nonsense. It's a con, in fact. It's a misrepresentation on a scale that, if it were put into financial markets, would be fraudulent. It's as bad as that.
A vicar I used to know used to say that he had studied economics and he had studied theology, and he was a Christian. He said, trying to persuade people that the virgin birth happened is a lot easier than trying to explain to people that the assumptions that underpin neoliberal economics are right, and he was correct. We are talking about a system here that is just unbelievable.
So we have to replace the absurdity of this economics with something that is based upon logic and on solid foundations.
So we're going to build something better, together, and that's well worthwhile in my opinion.
Poll
What's your view on neoliberal economics?
- It's total nonsense (80%, 225 Votes)
- I need to know more - tell me (17%, 47 Votes)
- It's right (3%, 7 Votes)
- I don't know (0%, 1 Votes)
Total Voters: 280
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Now this is something to look forward to. Brilliant idea Richard
I will be watching this series of videos carefully as I , like many others often struggle to be effective when encountering neoliberal views.
Thank you in advance.
I hope they work. I have a lot of writing to do.
I totally agree, Richard, and I have been saying as much to anyone who would care to listen for the last forty-five years, ever since neoliberal thinking became prominent in economics and politics. I look forward to the rest of this series of videos and the subsequent discussions that should ensue!
A call to arms!
I like it.
Fabulous
🙂
Look forward to this.
A great idea to demolish this fakery with cold, clear, logic.
We are trying to get people to stop believing in this neoliberal and neoclassical nonsense. Difficult when a lot of people are paid to believe it, even when they know it’s not true.
I don’t know why these people don’t implode with severe cognitive dissonance, although I wouldn’t wish it on anybody.
It’s all snake-oil, pure and simple, and it has been negatively impacting the lives of ordinary people for nearly half a century; destroying pretty much all the good that the post war Labour reconstruction [in this country at least] achieved in creating a working welfare state. Horrendous. I’m seventy, and angrier and more socialist in my views than ever, and what I’m witnessing is deeply, deeply disappointing. If I were less sanguine than I naturally am, I would term it distressing in the extreme, bordering on the depressing…
Yes, and it benefits an already wealthy and powerful minority directly at the expense of everyone else, with particular brutality and hardship on those who are poor, disabled and otherwise vulnerable economically or whatever.
I’m nearly 60 and feel the last 10 years or so have been pretty awful. Johnson onwards we have witnessed the unravelling of civil society, social norms and moral, social and economic bankruptcy in plain sight.
My story of resistance started long ago but when I criticised the government over the Grenfell fire I started to have police cars outside my house and other cars and various kinds of shenanigans I don’t have the space to go on about here. Suffice to say, whenever I spoke the truth, there they were. Ironic really. This situation has been going on for about 6 or so years and has recently stopped. I decided somewhere inside that if I am to be persecuted anyway, I might as well speak the truth, and so I do.
We have now gone so far down the rabbithole that we have governments we elected defending potential genocide and the further immiseration of the poor and disabled in the UK to their poverty, further suffering and deaths whilst having the gall to claim some kind of moral imperative. They are hypocrites on a Pharisee like scale. Those who benefit and do not speak out are now guilty.
The majority of people are sick and tired of the austerity for the poor here and even the middle class, whilst the wealthy get richer. We are in a crisis that can and should be averted but our political and other chiefs need to step back from the various insane policies and injustices they are continuing and promoting and accept they are wrong. We need a few brave individuals in the system to have the courage to plainly speak out. But whilst they decide we need to continue to stand and resist the injustice and growing evil, which is what it is, in peaceful and lawful ways.
100 years ago we had a General Strike to make government sit up and listen. I do hope their moral cowardice, greed and hypocrisy do not make that a necessary situation again.
A booklet would be brilliant. It would be worth many cups of coffee
I am really looking forward to this – thank you Richard
I read a bit about the assumptions underlying neoliberalism after the 2008 collapse and was amazed that they were considered a proper basis for anything!
This will hopefully strengthen my ability to argue back.
I voted non-sense but household economics are those who only make sense to the people. MMT requires a different level of understanding.
My remarks:
1-Up until the 70s MMT was the mainstream yet lost, Richard gives a very non convincing reason, he might be correct but I am not persuaded yet.
2-MMT restored capitalism, but bred also the individualistic (idiotic) middle class that then considered MMT a burden for their further ascension, allied with the upper class and got betrayed, yet they see upwards and believe they will be lucky in the music chairs.
3-MMT politics should be used not only to manage capitalism in short term but to overcome it in the mid term. We have to admit that capitalism is not a sustainable system, it may have its heydays but it cannot perpetuate, it is mathematically proven!
4-This (overcome) didn’t happened because of short termism and/or because people have been indoctrinated to just look their household and not bother about politics/ideology –> how they want to live their lives…the answer to this became “to consume more than my peers and thus elevate to the next class”.
5-It is difficult when people are riding a pyramid (like booming stock market) to persuade them this is their devastation, as they experience it as wealth.
6-One of the fundamental problems with “economism” is that it is difficult to measure quality. You cannot articulate a law “veggies shall have good taste and not taste like water”. So the problem is much much wider, better accounting is welcome but not enough.
7-The MMT system can be easily hijacked by politicians and organised voters to print free money for themselves and tax the unorganised rest. Thus political-democratic reform is required as well.
8-People would like a system that would objectively (good luck with the definition) remunerate everyone and cannot be hijacked by organised minorities, rentiers, freeloaders. And this justice in rewards to be very obvious as well, that’s why effective markets is a successful fairy tale, because it addresses a very popular demand.
9-There is a story that Maggie admitted it didn’t work well, but blamed the businessmen that instead of grapping the opportunities she opened to do some brave entrepreneurship, they became rentiers. If it is true, it is a romantic view of politics and not a dialectic/systemic.
10-Rentier economy digresses back to feudalism.
I have no idea where your understanding of MMT comes from, but there is nothing in here that I recognise. Let’s start with the fact that MMT did not exist in the 1970s, because nobody had yet talked about it, and move on from there to the fact that there is no such thing as MMT politics. MMT simply explains how money works in a fiat money economy. That’s it. Everything else that you have suggested makes no sense. It may be your political view, but it is not anything to do with MMT.
I am a bit distracted at the moment by personal things and clicked the wrong button. Of course I think that neoliberal economics is total rubbish.
Sorry!
I would argue that all monetary systems are essentially fiat: the value of metals and minerals is dictated solely by agreement and control of their supply. There is no reason why arbitrary currencies should be considered differently. There are no tablets of stone from God. What can constructed can be deconstructed & vice versa. Which is essentially why economics is not a science, but a political tool…
I admit I am not sure what your point is. Sorry. Might you clarify?
Hi Richard – don’t get me wrong: I agree totally with your views on what is failing society and the iniquities and inequalities that spurious economic theories such as [in particular] neoliberalism foist on any unwitting populace, couched in terms of it’s ‘just the way things are’. Rather, though, I simply don’t see any rigorous science behind any economic theory at all. None appear to me to have accurately reflected economic reality outside of periods of relative economic stability, and none have predicted with any certainty or precision those periods of economic criticality that have had such catastrophic effects on the lives of the principal contributors to an economy, viz: the hoi polloi, who actually generate the wealth of the privileged in the first place. The impression I have of you from your excellent channel is one of a man of straight-talking common sense. Economic theory however – whatever its stripe – is quite the opposite, and just like the then ‘modern’ syntactical theories I studied in my post-grad linguistics, each one will be consigned to the bin of muddled ideas. Check the post on my website tonight: don’t expect academic depth or rigour – I’m too much of generalist and far too old to be arsed, these days, but I do have a long view and some experience of life…
You are right.
This is now why I think the answer might lie in quantum theory. Sorry….and I’m not pretending I understand it all.
But then again, Roger Penrose – and others – consider quantum theory to be quite flawed and possibly based on a false premise or two. I guess human history and thought is simply a continuum of reappraisal and reflection, with no absolute certainties to comfort us in our ‘cloud of unknowing’. Doesn’t stop us getting righteously angry, though, does it?
All the Best
K