Full transcript
0:00The A-Z of isms… neoliberalism.
0:04Friedrich Hayek, a tweedy, Austrian-born economist,
0:07had one of those light bulb moments in the mid 1930s
0:11and switched on an ideology that unites its enemies in scorn,
0:15but has inspired governments and entrepreneurs down the decades -
0:19neoliberalism.
0:21The idea was built on the classical liberalism of the 18th Century
0:25and a defence of individual liberty..
0:27protecting private property and the freedom of markets
0:30from external interference -
0:32taxes, regulations, levies -
0:35as much as possible.
0:37Neoliberalism argued
0:38that the market wasn't just an absence of interference,
0:42it could produce a philosophy or a way of thinking all of its own.
0:46That meant looking at the world and at transactions in daily life
0:50through the eyes of the market.
0:52You can glimpse this, for instance,
0:54when I say, “I’m in the market for a beer” -
0:57showing that we’ve internalised the idea of a market for other values.
1:01Nowadays, you probably hear the word neoliberalism
1:05used more as a term of abuse -
1:07hurled by opponents at economic globalisers, nasty bankers
1:12or governments limiting spending on public works or welfare.
1:16The word neo, or new,
1:18has morphed into a way of signalling...
1:22It’s the nearest thing economic terminology has to a rotten tomato.
1:27But neoliberalism isn’t just a dirty word -
1:30it’s an entire mindset of approaches
1:32to the way state and market interact with our aspirations -
1:36emphasising privatisation over state control,
1:39as the best way to deliver public services.
1:42The advent of neoliberalism
1:44led to one of the great punch-ups of economists -
1:47between Hayek and his best frenemy John Maynard Keynes.
1:51Keynes argued that government should get involved
1:53in increasing demand to keep productivity up,
1:56and unemployment down.
1:59Hayek dismissed Keynes as “knowing very little about economics”,
2:03and he wrote a snotty book review of one of Keynes’s major works.
2:07Despite their bickering though,
2:09their competing ideas - Keynesianism and neoliberalism -
2:12remain the seesaw of big thinking in practical economics.
2:17Keynesianism won for a good while after World War Two,
2:21but by the end of the 1970s,
2:23public sector strikes and worries about “stagflation” -
2:26an ugly combo of stagnation and inflation -
2:29persuaded some mould-breakers to look back to neoliberalism
2:33as a way to perk up flagging economies.
2:36Ronald Reagan and Margaret Thatcher led the way in embracing the notion.
2:41And, so did the ruthless dictator Augusto Pinochet in Chile -
2:45which rather marked down the democratic scorecard
2:48of neoliberalism.
2:50The financial crash of 2007/8
2:52created a more testing mood towards de-regulation
2:56and neoliberalism gained a bad rep,
2:58because it was taxpayers who had to bail out the banks.
3:02But there’s a broader, cultural reason
3:04neoliberalism gets it in the neck right now.
3:07Inevitably, it leads to such fast-paced,
3:09uncontrolled globalisation,
3:12because it does away with barriers to trade and to financial flows.
3:16It prizes the innovative above continuities.
3:19So you could say it puts the corporation above the nation.
3:23But the globalised world we inhabit -
3:26one of start-ups, the ability to move money and borrow cheaply,
3:30and companies operating across borders -
3:32owes a lot to the Austrian, Friedrich Hayek,
3:35and his light bulb moment.
3:38Thanks for watching! :)
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