Brad DeLong admits neoliberal era has come to an end
from Lars Syll
Should Democrats lean away from market-friendly stances and get comfortable with big government again? Should they embrace an ambitious 2020 candidate like Sanders and policies like the Green New Deal, or stick with incrementalists like former Vice President Joe Biden and more market-oriented ideas like Obamacare?
One of the most interesting takes I’ve seen on this debate came from Brad DeLong, an economist at the University of California-Berkeley … one of the market-friendly, “neoliberal” Democrats who have dominated the party for the last 20 years …
Yet DeLong believes that the time of people like him running the Democratic Party has passed. “The baton rightly passes to our colleagues on our left,” DeLong wrote. “We are still here, but it is not our time to lead” …
Economists — in many ways separated from the life of ordinary people — are with their ‘the model is the message’ thinking particularly inclined to confuse the things of logic with the logic of things. But as we all know, neoliberalism is nothing but a self-serving con endorsing pernicious moral cynicism and gobsmacking ideological trash maintaining that unregulated capitalism is a ‘superlatively moral system’:
The rich man may feast on caviar and champagne, while the poor woman starves at his gate. And she may not even take the crumbs from his table, if that would deprive him of his pleasure in feeding them to his birds.
David Gauthier Morals by Agreement
Mainstream economists have a tendency to get enthralled by their theories and models and forget that behind the figures and abstractions there is a real world with real people. Real people that have to pay dearly for fundamentally flawed doctrines and recommendations. From that perspective seen it is, of course, great that Brad has come to understand that neoliberalism is an oversold ideology and not the stuff ordinary people’s dreams are made of.
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Real-World Economics Review Blog 
That is a keeper! I learned of David Gauthier’s quote through your work and it inspired me to riff on the modern day monstrosity of evangelical fundamentalisms unholy alliance of market fundamentalism and religious fundamentalism taught from the pulpit of many evangelical churches in America today; I call it the twisted gospel.
I consider myself one of those ordinary human beings (bonbu 凡夫). Career wise, my academic training was in accounting (forensic accounting was my passion), and once bought into the ideological trash and sometimes confused the things of logic with the logic of things. Along the way I trained myself in software engineering and became a developer in Microsoft during the heady times when everything was moving onto the Internet and Microsoft was transforming its platform to become what is now called the .NET Platform, Microsoft’s response to Java.
Microsoft formed a strategic alliance with Arthur Anderson (one of the big five accounting firms) and partnered in integrating its accounting software and enterprise management software into a new business model for Arthur Anderson: technology consulting. I watched my coworkers move from internal Microsoft positions to Arthur Anderson and back (I knew too much already about the big five to desire to make such a move). Eventually Arthur Anderson would collude with Enron in its use of aggressive off-balance sheet partnerships to hide its losses (see Bigger than Enron), shenanigans I was already too familiar with.
Lars and others who publish on RWER have opened my eyes and given me a vocabulary to fully understand. As the song does,
All these pieces
Broken and scattered
In mercy gathered
Mended and whole
Empty-handed
But not forsaken
I’ve been set free
I’ve been set free
Amazing grace
How sweet the sound
That saved a wretch like me, oh
I once was lost
But now I’m found
Was blind but now I see ….
Addendum: Arthur Levitt leading the SEC had just completed a study documenting how the big five in taking on consulting business with clients they were already providing audit services created a conflict of interest, and identified this as the primary reason for increasing audit failures (clean audit’s that turn out dirty). FASB along with the SEC recommended a new rule that would limit or stop this. The big five and their lobbyist Harvey Pit launched an all out war on the SEC with the help of ilk like Newt Gingrich and Joseph Lieberman ending in full regulator capture of the SEC by making Harvey Pit the head of the SEC under George Bush.
Rob, do you know the book, Relevance Lost, the Rise and Fall of Management Accounting (Harvard UP, 1987 by H. Thomas Johnson and R. S Kaplan. Johnson had a great influence on my thinking. He gave up his accounting professorship at the University of Washington, to become a professor of sustainable management in the business school, Portland State University. He was particularly impressed with the Toyota management processes at its Georgetown, Ky plant. I met him because I submitted an article on British cost accounting, to the Accounting Historians’ Journal, and he was one of my referees.
I don’t, but it sounds very interesting and relevant what what my wife us now doing. I will check it out for sure. I left corporate accounting partly because of my experience and partly because I discovered I loved the creativity of software engineering. Creativity in accounting is a euphemism for cooking the books ;-)
Thanks Robert for the heads up.
They have always laughed and continue to do so. Plunder, murder and condemnation of billions to destitution, starvation must be a funny business. May they remember the famous quotation by the Jewish man they should supposedly be worshiping that : “It is easier fro a camel to go through a needle than a rich man to heaven?” or similar.
As Economics and strict “religiously” cannot really make good religion, will this dismal science ever repent? One must remain alert! Fake religion always leads to fake confession. And that is not good.
The proof of repentance is in the pudding. By their fruits we shall know them.
In the UK Brexit has become the opiate of the people who otherwise would be besieging Parliament to end austerity.
Sad, it just makes me sad to watch. But then, I just left the US for Japan and find myself relieved to be away from the crazy.
Here I sit in Japan in a British pub downing a Guinness contemplating how small the world is.
Entirely by happenstance, I stumbled into DeLong’s interview by Ali Velshi. His “we wuz wrong” demeanor almost made me think him humble.
Lars:
I also thought the interview with Brad DeLong was a significant one, indicating a turning point in thinking about the political economy.
Assuming these forecasts of neoliberalism’s end are not greatly exaggerated or even false, what will replace neoliberalism when it’s good and dead? Some assume that whatever the replacement is, it won’t be capitalistic. Big assumption. According to Milton Friedman, neoliberalism accepts the liberal emphasis on the importance of the individual, adding to this the goal of a “competitive order.” Neoliberalism is a multifaceted way of life. Covering everything from economics to government to education and family life. Neoliberalism has failed on its own terms in many places — failing in boosting productivity or living standards or growth — while also ripping at the social fabric of various societies. Dissatisfaction is felt both on the Right and the Left, with Trumpian aggressive, authoritarian Statist action representing one attempt to build an alternative. Our challenge, I think, is to build a different kind of alternative from the Trumpian vision — and to talk with some specificity about a new form of government, politics, and economic rationality, however transitional that may be. In this transition constructive specificity is necessary. For example, a challenge we face is that the image and reputation of government has been injured by neoliberalism. Government is regarded as inefficient, bloated, and corrupt; not up to the tasks of meeting the needs of citizens. Another challenge is that the Left has been notably patchy in its provision of a concept of the State. Salvaging must involve strong commitments to disciplining and democratizing the State.
But perhaps there are non-Left replacements for neoliberalism. The creators of neoliberalism pictured it as a “transnational movement” accepting from the beginning that undermining what they saw as the evils of economic planning would take a long time, lots of effort, and careful coordination. But neoliberalism rests on a faulty assumption, that knowledge is asocial. Reverse that assumption and neoliberalism falls apart. What neoliberals fail to see, cannot see due to their attachment to extreme individualism, is that by tapping into the social nature of knowledge through collaborative reflection, the limitations imposed on us by our individual perspectives can be overcome. And democracy, in the positive Deweyan sense, is the most effective way of putting these perspectives to work. Like George Herbert Mead and Lev Vygotsky, John Dewey viewed the mind and its formation as a communal process. Thus, the individual is a meaningful notion only when regarded as an entangled part of his or her society, and the society has no meaning apart from its realization in the lives of its individual members. This practical element in Dewey’s thinking, learning by doing, arose from his subscription to the philosophical school of Pragmatism. The world has never needed American’s unique way of life, pragmatism more than it does right now.