From
David Harvey's A
Brief History of Neoliberalism
Part
8 – By 2000, corporate power restored to the 1920s levels through
the rationalization of the fundamentally irrational neoliberal
principles
All
of this demanded some rationale, and to this end the war of ideas
did play an important role. The economic ideas marshalled in support
of the neoliberal turn amounted, Blyth suggests, to a complex fusion
of monetarism (Friedman), rational expectations (Robert Lucas),
public choice (James Buchanan, and Gordon Tullock), and the less
respectable but by no means uninfluential ‘supply-side’ ideas of
Arthur Laffer, who went so far as to suggest that the incentive
effects of tax cuts would so increase economic activity as to
automatically increase tax revenues (Reagan was enamoured of this
idea).
The
more acceptable commonality to these arguments was that government
intervention was the problem rather than the solution, and that ‘a
stable monetary policy, plus radical tax cuts in the top brackets,
would produce a healthier economy’ by getting the
incentives for entrepreneurial activity aligned correctly.
The
business press, with the Wall Street Journal very much in the
lead, took up these ideas, becoming an open advocate for
neoliberalization as the necessary solution to all economic ills.
Popular
currency was given to these ideas by prolific writers such as George
Gilder (supported by think-tank funds), and the business schools that
arose in prestigious universities such as Stanford and Harvard,
generously funded by corporations and foundations, became centres of
neoliberal orthodoxy from the very moment they opened.
Charting
the spread of ideas is always difficult, but by 1990 or so most
economics departments in the major research universities as well as
the business schools were dominated by neoliberal modes of thought.
The importance of this should not be underestimated. The US research
universities were and are training grounds for many foreigners who
take what they learn back to their countries of origin –– the key
figures in Chile’s and Mexico’s adaptation to neoliberalism were
US-trained economists for example –– as well as into
international institutions such as the IMF, the World Bank, and the
UN.
The
conclusion is, I think, clear. ‘During the 1970s, the political
wing of the nation’s corporate sector’, writes Edsall,
‘staged one of the most remarkable campaigns in the pursuit of
power in recent history.’ By the early 1980s it ‘had
gained a level of influence and leverage approaching that of the boom
days of the 1920s’. And by the year 2000 it had used that
leverage to restore its share of the national wealth and income to
levels also not seen since the 1920s.
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