Brad DeLong admits neoliberal era has come to an end

10 Mar, 2019 at 11:48 | Posted in Economics | 3 Comments

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?

austerOne 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” …

Zack Beauchamp/Vox

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’:

neo 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.

3 Comments

  1. De Long is an historian and very likely to be on the sceptical side when it comes to the value of models. Real world complexity is not something you deal with with what Tony Lawson describes as “atomistic and isolationist fallacies”. Neo-classical economics, which does look at the world like this, and Neo-liberalism are linked. At the heart of their message is that social systems like economies can be looked at with tweaked models of markets and addressed with market based solutions. It is underpinned by an a-historical and philosophically dubious methodology. It is fundamentally at odds with Keynes’ key message about uncertainty and does not provide the Left with an adequate understanding of capitalism, the problems that capitalism now faces, or ideas with how to deal with them.

    • The famous “ergodic” presumption of neoclassical economics is a-historical and the insistence on analytic theory dominating operational modeling and observation exempts mainstream economics from the need to talk about mechanisms that can be objectively observed and measured. So, yes, Brad DeLong, with his interest in history, sometimes seems to a one-eyed man in a kingdom of the blind.
      .
      I fear, though, that this still leaves the Left without an adequate understanding of capitalism or practical ideas of how to deal with the challenges of the 21st century. We are arrive now, after forty years of neoliberalism triumphant, intellectually impoverished.

  2. Nice post Lars, and nice comment Nanikore.


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