Zombie ideas that just won’t die
This post is loosely related to themes such as “The Great Stagnation” and “The Complacent Class”, to cite two recent books by Tyler Cowen. Also loosely related is Scott Alexander’s epic blog post Meditations on Moloch. And perhaps “The End of History”.
As time goes by, neoliberalism seems more and more like a immovable force.
Think about it. The Great Recession seemed to completely discredit neoliberalism. All the most fashionable intellectuals on the left and the right say so. Entire governments on the left (Syriza), center (Five Star), and right (Trump) are elected to replace neoliberalism with something better. Socialism, nationalism, whatever. The British vote to leave the EU.
But neoliberalism is like the zombie that cannot be killed. Syriza can’t do much of anything, and Trump’s only major achievement is an ultra-neoliberal corporate tax cut. Here’s today’s FT:
In practice, Mr Grieve himself has said another referendum is the “only” route to stopping Brexit. What the advocate-general’s opinion does is open the legal path. Indeed, on Tuesday analysts at JPMorgan doubled their estimate of the possibility of “no Brexit” to 40 per cent — while halving the probability of “no-deal” in early 2019 to 10 per cent.
Are hardline Brexiters worried that no-deal is off the table?
Not outwardly. “It’s full steam ahead,” said one pro-Brexit Tory, who predicted the government would lose Tuesday’s meaningful vote by a margin of 40.
However, supporters of Mrs May’s deal argue that Brexiters have trapped themselves and that parliament, in which a majority favours soft Brexit or no Brexit, is now in control.
“They’ve completely messed it up,” said one Tory MP. “I’m coming to the conclusion that they wanted the [2016 Brexit] referendum only as a way of protesting.”
What!?!?! There’s still a 40% chance that Bryan will win his bet? That’s crazy. It’s as if NIMBYism also applies to entire policy regimes. No new economic policy regimes in my backyard! The British public is like that accountant in the Monty Python routine. They wanted DRAMATIC CHANGE, just so long as nothing in their life actually, you know, changes. “We want to be like Singapore!” . . . “Well, maybe not, perhaps we could first try Norway.” . . . “Er, don’t rush me.”
I never got the Trump phenomenon until I figured this out. Re-read the last six words of the FT quotation.
I’m a neoliberal, and thus am thrilled with this state of affairs. But I’m uneasy because I don’t understand why I’m winning. So what gives—why is neoliberalism so hard to kill? I await an explanation from my commenters.
PS. Here’s what happened in 1968, fifty years ago. First men to orbit the moon. The Tet offensive in Vietnam. Two assassinations of US political leaders. Revolutionary activity in countries all over the world (Mexico, China, Czechoslovakia, France, Germany, etc., etc.) Race riots and student riots in the US. The 747 airplane launched. Two thousand miles of interstate highway are built—in one year. Friedman’s natural rate hypothesis. The ATM, 911 lines, and air bags invented. Kubrick’s “2001” released. The White album and Beggar’s Banquet. Fifty years later we have what? What happened this year? The stupid fight over Kavanaugh? You might argue that there are all sorts of cool technological developments occurring now. OK, but consider this:
[Engelbart] went on to considerably more significant accomplishments, including the computer mouse, the graphical computer interface, text editing, hypertext, networked computers, e-mail, and videoconferencing, all of which he demonstrated in a legendary “mother of all demos” in San Francisco in 1968.
That’s from a book entitled “How to Change Your Mind”. Which modern equivalent of Doug Engelbart came up with that many neat ideas this year?
I miss 1968.
I’m bored.
Tags:
5. December 2018 at 21:42
Don’t be bored. I just read that AI has now done the first thing that I regard as genuinely useful (get a significant part of the way toward working out how proteins are folded). There might be some good stuff coming soon.
I agree that everything looks either dull or dire, politically.
5. December 2018 at 22:40
Keep in mind that in 1968 the vast, vast majority of the population wouldn’t have seen anything interesting in stull like a GUI, mouse, or email. The great inventions’ impact isn’t always immediately noticeable.
6. December 2018 at 02:09
I’m sorry you’re bored. You’ve retired to Orange County, so unless you have some stimulating friends around or seriously get into a hobby, I’m not sure what else you can expect… Personally, Twitter and blogs – plus work – keep me going.
I think the end of Bretton Woods and fixed exchange rates disposed of serious challenges to neoliberalism. There is now very little respite against the judgement of markets on bad policies in countries on flexible exchange rates. Countries like the USSR and India had no choice but to liberalise when they ran out of foreign exchange. North Korea is the exception that proves the rule.
6. December 2018 at 03:46
I’m not sure how fixed exchange rates would protect against the judgement of the market? It’s seems much easier to run out of exchange reserves when trying to defend an exchange rate.
A closed capital account might be more likely to shield out that judgement?
6. December 2018 at 04:36
Scott, I can help you with your boredom. Things are about to accelerate and the talk of a “singularity” (whether something “singular” actually happens or not) points to rapid acceleration, and soon. See my talk on the 8 drivers of change for this century:
https://www.youtube.com/watch?v=6lZSCZMJTLI
6. December 2018 at 04:45
I second Phil H. If you want to get less bored, read some papers on AI and machine learning. There is a lot of cool stuff going on under the hood.
And if you need something more visually stimulating, SpaceX are still doing very cool things if you look beyond the Elon Musk melodrama.
6. December 2018 at 05:46
I come to your site to get optimistic about some hopeful monetary jive you are pushing and find out you have caved to the forces of Dreary. Then you review mostly horrible things about 1968 (even the White Album, which I always viewed as the Beatles “ironically” showing how easy it was to mass produce hits ——was really the first iteration of their break up——Beggars Banquet——funny—-imagine if some one came out with Stray Cats today? “the click clack of your feet on the stairs……….). Plus the Andy Kessler and others, review of what we DID NOT know was going on.
Orange County? “Here come those Santa Ana winds again”…….I imagined you were north of San Francisco—-obviously my fantasy, not yours. I will come back some other time
6. December 2018 at 06:47
On the PS, it would be interesting to go back and look at what inventions people were excited about at the time. For instance, the Scientific America issue covering the top 10 discoveries in 2018 just arrived in my mailbox. What would the same thing in 1968 look like.
Also, the mother of all demos took like 15-25 years to actually be implemented in products that everyday consumers purchased. Good ideas sometimes take a while to be implemented.
6. December 2018 at 07:47
If you’re bored Professor, I’m curious what your thoughts are on the rumored CRISPR babies in China, and if the potential in that field is in any way interesting/exciting to you.
6. December 2018 at 07:58
Scott,
I think that’s largely a cognitive illusion. In 2018, there were at least as many great advances, events, and discoveries as in 1968. The crucial factor is time and the test of time. The distance to 1968 is so great that all great advances can be sorted out easily. That’s not the case for 2018 at all. Current years are full of noise. It’s a cognitive illusion.
And maybe it’s your age, too. Maybe you are getting old, and grumpy, and nostalgic, and pessimistic. =)
6. December 2018 at 08:20
Well, I think that between autonomous vehicles, electric vehicles, and super cheap energy from solar panels and wind turbines (and other advances that I suspect will make building homes cheaper where cheap homes are allowed to be built), we are starting to lay the groundwork for a society in which work will occupy a vastly smaller share of the time that people born into developed countries spend. I think that will have unpredictable consequences. If places in the US won’t allow the construction of cheap, but quality, housing, how many US citizens will have a working career of say, 10 years or so, and then pack and move to some other country to live the rest of their life without needing to work? This is arguably already a possibility for a large share of the population, but most don’t realize it. What happens if this becomes more common?
6. December 2018 at 08:29
Scott,
You ask why neoliberalism is so hard to kill. My short answer is that neoliberalism is just what we call the set of economic ideas — deriving mainly from Hayek and the Chicago school — that supported a series of structural changes in the 1970s and 1980s that have created a new stage of modern capitalism (flexible exchange rates, monetary rules, deregulation of transportation and communications, removal of barriers to global capital flows, privatization of state enterprises, global value-chains, collapse of the Soviet bloc, etc.) All of these changes — along with the counterculture of the 60s — facilitated the entrepreneurial activity that gave us hi-tech. (As your Engelbart example demonstrates) There can be no durable reversal of this new system (just an occasional partial setback) because any serious attempt so disrupts the complex pattern of globalized production, trade, and finance that markets tank, global growth falters, and recession looms. In that way, the system rights itself and proceeds on course. Of course, this summary sounds too deterministic. It’s the responses of millions of people to market signals that restores equilibrium. Look at what’s happened with NAFTA, the midterms, and the market reaction to trade war threats. Trump’s counter-revolution will die aborning because — in the last analysis — those who have unfortunately fallen behind in the relentless process of “creative destruction” are simply not numerous enough to prevail, except temporarily due to an electoral fluke.
I lived through the excitement of 1968 but I agree with those who point out that we may not yet have enough distance to recognize all the important things that are currently happening. I’m not bored yet.
6. December 2018 at 08:30
For Scott’s point about neo-liberalism, the obvious place to look is the political economy of neo-liberalism. Neo-liberalism’s supporters are vastly better organized than its opponents, quite unsurprisingly, given that most everyone derives their income from participation in the system in some way or another. So almost all industries, all units of government, and all professional organizations have been selected for (optimized) to work in the neo-liberal context. I cannot think of any large institutions or organizations or form of social organization, with one notable exception, that isn’t really dependent on neo-liberalism for its income. That one organization is organized religion (and maybe you can include tribal social organization in here as well), which predates the industrial revolution, modernity, and neo-liberalism. But right now, outside of some Muslims (who may or may not be a certain kind of crazy), there aren’t any religions that I know of that are actively trying to build alternative kinds of communities that could sustain themselves without neo-liberalism. Of course, you do have folks like the Amish or people living in monasteries who would easily outlive a collapse of civilization. But they aren’t trying to take over the world.
6. December 2018 at 11:47
I think David Levey provides a cogent case for the durability of neoliberalism with which I concur. I do wonder, however, if we can be utterly confident in the long-term stability of any set of social arrangements that leaves open the possibility of non-optimal outcomes at the societal level derived from rational choices at the individual level. Scott Alexander in his Moloch piece, to which you link, provides multiple examples ranging from the Prisoner’s Dilemma to the Malthusian trap to illustrate the point. We can add the tragedy of the commons and other familiar examples of the fallacy of Mandeville’s Fable of the Bees. I would like to believe that the neo-liberal order has a built-in set of self-corrective mechanisms that ensure its long-run stability but that is more a wish than a conclusion derived from evidence.
6. December 2018 at 12:04
Yes, Mathias, you are right. It is exchange controls, which normally complement fixed exchange rates, that are the key to avoiding the direct judgement. The application of both have declined since the 1970s.
6. December 2018 at 12:26
Scott,
Perhaps “neoliberalism” is unstoppable because you define the term broadly enough to make the assertion “neoliberalism is winning” practically unfalsifiable. For example,
1) Has there ever been a time in the history of the United States when it has been other than “neoliberal,” (i.e, mostly market economy, mostly democratic politics). If so, when?
2) Is the modern Chinese government “neoliberal”? That is, is a country in which the autocrat has eliminated term limits on himself, reaffirmed the canonical status of Marxism beneath a gigantic picture of Karl Marx, and instituted a near-Orwellian “social credit” system neoliberal? If your answer is yes, what would China have to do to not be neoliberal? If your answer is no, then the resistance of the world’s most populous country to neoliberalism would appear to contradict your confidence.
3) Emmanuel Macron, a quintessential European neoliberal, has just suffered a humiliating defeat at the hands of something very like a national revolution. Is this a defeat for neoliberalism? If not, what would constitute such a defeat?
4) Is political democracy, in your view, an essential element of “neoliberalism?” (See China example, above). Certainly economic neoliberalism has validated itself with an alleged connection to democratic politics. But it is becoming increasingly clear that the West’s governing classes and bureaucracies view democratic inputs as illegitimate when the voters’ preferences lie outside of the (largely neoliberal) parameters set by the governing classes (“populism,” when used in a negative sense, refers to preferences outside of those parameters). The realization by Western citizens that their governments view democracy primarily as a device for ratifying and validating neoliberal polices, and that the device should be tinkered with or modified until it achieves that end, is bound to produce popular resentment (again, take France).
4) If, as you suggest, scientific and cultural dynamism is slowing, that might not be unrelated to the ascendancy of a governing class that is sufficiently confident in the inevitable victory of its own philosophy to ignore or neutralize all contrary popular inputs.
6. December 2018 at 13:15
I look at this both ways. On the one hand, I agree with some people here that we are working from too broad a definition of neoliberalism. On the other hand, there are some basic tenets, mostly just market competition with some allowed degree of government regulation, that give overwhelmingly better economic results than the alternatives. Call this neoliberalism if you want – it’s not wrong to do so. You have lots of flexibility to optimize within this system by adjusting the level and type of regulations and also social wellfare programs. But even a poorly optimized such system tends to perform a lot better than the alternatives.
6. December 2018 at 13:23
Ed,
I completely agree. Regarding certain topics, Scott likes to put up theories that aren’t falsifiable.
6. December 2018 at 15:22
Thomas Piketty explains a lot of this in his Brahmin Left v Merchant Right analysis.
http://piketty.pse.ens.fr/files/Piketty2018.pdf
There really isn’t a serious institutional and organisational constituency for something other than using markets to provide the goodies. Hence the intensification of culture wars, as that is where the Brahmin Left gets its jollies, and their continuing success there as the Merchant Right doesn’t care very much: indeed, is happy to get on board with a lot of it. Lots of folk hate PC and the Brahmin Left’s cultural politics, but they lack institutional power of any depth. There are religious networks, for example, in the US but they are clearly way outclassed in the culture wars.
6. December 2018 at 15:29
Everyone, Point taken about all the stuff being worked on now that will pay off in the future. I sort of knew that, but still couldn’t resist the quotation on the 1968 tech conference.
Rajat, I’m not bored with my personal life, I’m bored by the news. Nothing interesting seems to happen anymore.
I have plenty of interesting things to do in terms of films, reading, travel, etc.
Michael, Or how about “Under My Thumb”? I still can’t believe they banned “Baby, It’s Cold Outside”
Garrett, Very interesting, but then everyone now seems to be saying “STOP”.
David, Good points.
Karl, I share your concern. Some people seem to have an almost religious faith that things will work out. Based on 1914-45, I don’t.
Ed, Good questions:
1. If the US again adopted wage and price controls, or started controlling the prices of airlines, trucking, natural gas, etc. I’d consider that a move away from neoliberalism.
2. China is not very neoliberal, but vastly more than in the past. It’s moving that way.
3. Macron failed in one specific attempt to make France more neoliberal (but succeeded elsewhere), which relates to my NIMBY idea for policy. People don’t want change, and since neoliberalism is considered by intellectuals to be the status quo, that public opposition to change means neoliberalism is locked into place.
4. Yes, I see democracy as a part of neoliberalism, although I suppose it’s not the core of the idea. Hong Kong was pretty neoliberal, without democracy. The anti-neoliberal parties like Syriza that are elected are quite free to abandon neoliberalism, but they are afraid of the wrath of voters. Ask yourself why Syriza didn’t leave the euro? It was fear of voters, who liked the status quo. It’s not that voters want radical change and governments are holding them back, voters don’t want change. They are policy NIMBYists.
6. December 2018 at 15:34
Lorenzo, Good point.
6. December 2018 at 17:45
Virtual reality is taking off similar to how the internet did in 1994/1995, but you can’t put a specific year on either.
Internet users in the U.S.
1990 1%
1991 1%
1992 2%
1993 2%
1994 5%
1995 9%
1996 16%
1997 22%
1998 30%
VR users, U.S.
2016 10 million (3%)
2017 22 million (7%)
2018 37 million (11%)
2019 49 million (15%)
VR users, worldwide
2014 0.2 million
2015 6 million (0.1% of the world)
2016 43 million (0.5% of the world)
2017 90 million (1% of the world)
2018 171 million (2% of the world)
You can see where this is going…
7. December 2018 at 06:20
Hopefully, I am reading something into nothing here. For the second time in a couple months, one of your posts has me worried you have depression. Depression is real, and people die from it. Please take care of yourself.
7. December 2018 at 06:41
50 years ago Astral Weeks was released.
8. December 2018 at 08:32
One of the reasons that neoliberalism survives is a form of the appeal to consequences. If neoliberalism is really wrong, the consequences are truly awful to contemplate. Thereforee its proponents defend it to the death.
8. December 2018 at 09:57
Todd, Don’t take my posts too seriously, I have dark sense of humor. If it weren’t for the PC police, it would be far darker.
I’ll have to try VR someday.
Philip, Great album.
9. December 2018 at 10:32
Maybe neoliberalism sticks around because it works? All the other alternatives rely too much on selflessness. Which is in very short supply and like utilitarianism, very much a judgement.
On progress on AI – I am genuinely scared by the progress being made by people like DeepMind. This is definitely civilisation killer material we are playing with. I hope AI progress turns out to be really difficult.
10. December 2018 at 08:23
Rajat:
“I’m sorry you’re bored. You’ve retired to Orange County, so unless you have some stimulating friends around or seriously get into a hobby, I’m not sure what else you can expect…”
SS:
“Rajat, I’m not bored with my personal life….”
C’mon Rajat, the man spent his life writing economics journal articles. And he’s a big fan of 2001. You really thought Orange County could touch him? He may not be able to stand it, and have to move somewhere even less exciting. Maybe San Bernardino.
10. December 2018 at 08:48
It’s not about 1968, it’s about 1965, but British blogger (mostly about jazz) and journalist Richard Williams has a take that may be of some relevance to the “bored” point:
https://thebluemoment.com/2018/01/26/1965-annus-mirabilis/
Key quote:
“But although [the Zim’s] change of direction was a shock, it was not a surprise. Because in 1965 change was expected: every month, every week, almost every day. Every time you walked into a record shop, opened a book, bought a magazine, turned on the TV. Between picking up your coat and putting it on.
THE YEAR 1965 started with the Righteous Brothers’ “You’ve Lost that Lovin’ Feelin’” (the greatest of all orchestral pop records) and ended with the Beatles’ Rubber Soul (their most satisfying album) and contained so much great music that it would take a year to listen to it, even now.”
For those of us who grew up with the idea that the “unit” of music was the album, more than the song, it’s probably good to think about how that first evolved (and has now un-evolved, of course), and what was lost and what was gained. Technology and economics….
10. December 2018 at 08:53
Here’s another interesting Richard Williams blog post, on a 1968 John Milius film that either I’ve never heard of or have forgotten I heard of it:
https://thebluemoment.com/2017/08/03/big-wednesday-revisited/
And another one that touches on 1968, or at least on _Music From Big Pink_:
https://thebluemoment.com/2016/03/04/tales-of-woodstock/
10. December 2018 at 09:16
“The White album and Beggar’s Banquet.”
Of course recently (November 11) Tyler C. linked to a piece about the White Album and then asked the following question: “which song is the most popular/enduring on that album?”
Tyler C. being such an elliptical or epigrammatic (evanescent?) writer, you have to stop and think about what his point was in asking this question. I wonder if maybe his point wasn’t that *aren’t* any “popular/enduring” songs on it.
That isn’t a criticism – like a lot of people, it’s kind of always been my favorite Beatles album. But it’s also kind of amazing that for a band that released so many iconic tracks, they could release a double album with none of those.
Maybe for musicians “Blackbird” or maybe “Julia” is iconic, and “Helter Skelter” is at least notorious, in a sense. But I think if you were trying to explain to someone who was unfamiliar with the Beatles what the Beatles were all about, you might leave out the White Album altogether until about Lesson 20 or so.
As I’ve been pondering this question (in between episodes of twitting others for being boring), it’s occurred to me that maybe in the end the most popular/enduring (or at least enduring only, or iconic) track is going to be “Revolution 9.”
You can explain “Strawberry Fields Forever” or “I Want to Hold Your Hand” or “Hey Jude” or so many others just playing them, by listening to them. I’m not sure that would work with most of the tracks on the White Album. It’s a bit like Twain’s remark on Wagner’s being better than it sounds.