After a lengthy debate in which an Hayek fixated, austerity loving, Tory apologist who likes to smear anyone that disagrees with orthodox neoliberalism as a communist (see the Mensch fallacy), in which he repeatedly tried to lecture me about the neoliberal pseudo-economic orthodoxy to which he subscribes, whilst completely ignoring all of the specific points I had been making, he came out with this little gem:
"As I suspected you don't understand economics, the market or basic human drives." - John GreenshawHere's my reply:
"John, your confirmation bias is the only thing supporting your assertion that I don't understand economics, markets or human drives. It seems I actually understand them a lot better than you.
Of course human drives are essential to economics and "the market", but trying to parse human drives down to rational self-interest to create trendy economic Darwinianism models has failed spectacularly, because human drives are (obviously) not as simple as pure rational self-interest.
Even if it were that simple, rational self interest is completely nullified by anti-competitive practices (cartels, monopolies, oligopolies, price fixing, subsidisation of failure, corruption) and rational self-interest can be truly catastrophic when information asymmetry comes into play.
If you don't regulate to prevent anti-competitive practices, human motivations can just go and screw.
The lessons we should learn from the catastrophic meltdown of neoliberalism are that:
1. When your models don't fit, change the models to fit the world, don't try to change the whole world to fit the models.
2. Mindless deregulation causes economic chaos, not the glorious free-market utopia the neoliberal pseudo-economists have convinced so many fools into believing.
3.When your neoliberal deregulation experiment comes crashing down, bringing the entire global economy down with it, governments (yes, the "evil state sector") are there to bail you out with £trillions in taxpayers' cash to keep your whole reckless, corruption riddled casino open for business.
Finally, don't accuse me of not understanding markets and then demonstrate your own seemingly very limited understanding, you're just embarrassing yourself."The lesson from this is that you mustn't let orthodox neoliberals bully you in debate with their so-called economic "expertise". Remember that the neoliberal economic experts who demanded the financial sector be deregulated were the ones that enabled the financial sector recklessness that resulted in the neoliberal economic meltdown. What is worse, is that their beloved, rational self-interest based economic models abjectly failed to predict either the rise in financial sector greed and corruption due to self-interest, lack of deterrent and moral hazard (exactly the kind of "human drives" that John finds so important) or the spectacular financial sector meltdown.
When the experts these neoliberal apologists are citing are the very people that caused the largest financial sector meltdown in human history, you must take their pretense at "expertise" with a lorryload of salt.
It is important to remember that after the neoliberal economic meltdown, only the taxpayer, via the "evil" state sector remained standing to pump in enough cash to prevent systemic collapse. Anyone left still holding onto the "private good, state bad" idiom after that must either be wilfully blind or selfishly insincere.
Neoliberal economics should have been utterly discredited by the financial sector meltdown, however there are so damn many orthodox neoliberals, with so much wealth riding on the neoliberalised system, that they will carry on promoting their neoliberal theories, even though they were completely and utterly invalidated when the state sector had to rescue them from the consequences of the reckless, over-leveraged, corruption riddled gambling spree that had enabled with their mantra of deregulation and absurd self-regulating market fallacies.
The orthodox neoliberals caused the economic crisis, yet the only solution they offer is more of the same, this time dressed up as austerity. They are a dangerous ideologically driven bunch and their destructive theories and assumptions must be countered. Hopefully this article has provided you with some ammunition to do it.