Money  /  Book Excerpt

Survival of the Wealthiest: Joseph E. Stiglitz on the Dangerous Failures of Neoliberalism

In which “the intellectual handmaidens of the capitalists” are taken to task.

Belief in the market (and the materialism associated with it—­the more GDP, the better) became, for many around the world, the late-­twentieth-­century religion, something to be held on to whatever the theory or the evidence to the contrary.

When the 2008 financial crisis happened, it seemed impossible that these conservatives would hold on to their market fundamentalist religion, that markets on their own were efficient and stable. But they did, which confirmed that it was, in a sense, a fundamentalist religion, the truth of which is virtually unshakable by reasoning or, as here, events.

And they continued to believe in it even as the failures of neoliberalism described below became more and more evident.

They closed their eyes not only to the big failures but to the smaller ones that make life for so many so difficult—­airlines with myriad delays and lost luggage, cell phone and internet services that are unreliable and expensive, and in the US, a healthcare system that, while the most expensive by far in the world, is impossible to navigate and results in the lowest life expectancy of any of the advanced countries.

In this new religion, markets are always efficient and government always inefficient and oppressive. We simply weren’t appreciating fully the efficiency benefits of the two-­hour holds on the telephone with our internet provider or our health insurance company.

There was another way in which this “economic religion” was similar to more conventional religions: proselytization. Conservatives’ faith was assiduously spread through the media and, to a considerable extent, through higher education, effectively ushering out of the public and political zeitgeist any remnants of an alternative and more humane economic vision that had first emerged in the 1930s and then flowered again in the more turbulent period of the late 1960s and early 1970s.

There was still one more way in which neoliberalism was like a fundamentalist religion: There were pat answers to anything that seemed contrary to its tenets. If markets were unstable (as evidenced in the 2008 financial crisis), the problem was the government—­central banks had unleashed too much money. If a country that liberalized didn’t grow in the way the religion said it should, the answer was it hadn’t liberalized enough.

As we have seen, with a post-­Depression generation in charge in the last part of the twentieth century, governments around the world adopted one version or another of neoliberalism. It pleased the capitalists, and the simplistic argument that free markets would deliver both economic success and freedom seduced large numbers of people. I’ve highlighted the role of the Right in pushing the neoliberal agenda; but the Right was enormously successful in creating the mindset of the time. I’ve described the embrace of neoliberalism by Clinton, Schröder, and Blair.