Name: Neoliberalism: The story of a big economic bust up | A-Z of ISMs Episode 14 - BBC Ideas
Uploaded: 2020-09-06T19:15:30.000Z
Duration: 3 min 46 s
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Friedrich Hayek, a tweedy, Austrian-born economist,

had one of those light bulb moments in the mid 1930s

and switched on an ideology that unites its enemies in scorn,

but has inspired governments and entrepreneurs down the decades -

The idea was built on the classical liberalism of the 18th Century

protecting private property and the freedom of markets

that the market wasn't just an absence of interference,

it could produce a philosophy or a way of thinking all of its own.

That meant looking at the world and at transactions in daily life

when I say, “I'm in the market for a beer” -

showing that we've internalised the idea of a market for other values.

Nowadays, you probably hear the word neoliberalism

hurled by opponents at economic globalisers, nasty bankers

or governments limiting spending on public works or welfare.

It's the nearest thing economic terminology has to a rotten tomato.

But neoliberalism isn't just a dirty word -

to the way state and market interact with our aspirations -

emphasising privatisation over state control,

as the best way to deliver public services.

led to one of the great punch-ups of economists -

between Hayek and his best frenemy John Maynard Keynes.

Keynes argued that government should get involved

in increasing demand to keep productivity up,

Hayek dismissed Keynes as “knowing very little about economics”,

and he wrote a snotty book review of one of Keynes's major works.

their competing ideas - Keynesianism and neoliberalism -

remain the seesaw of big thinking in practical economics.

Keynesianism won for a good while after World War Two,

public sector strikes and worries about “stagflation” -

an ugly combo of stagnation and inflation -

persuaded some mould-breakers to look back to neoliberalism

Ronald Reagan and Margaret Thatcher led the way in embracing the notion.

And, so did the ruthless dictator Augusto Pinochet in Chile -

which rather marked down the democratic scorecard

created a more testing mood towards de-regulation

because it was taxpayers who had to bail out the banks.

neoliberalism gets it in the neck right now.

because it does away with barriers to trade and to financial flows.

It prizes the innovative above continuities.

So you could say it puts the corporation above the nation.

one of start-ups, the ability to move money and borrow cheaply,

owes a lot to the Austrian, Friedrich Hayek,

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Neoliberalism: The story of a big economic bust up | A-Z of ISMs Episode 14 - BBC Ideas

individual

mindset

nasty

embrace