Cause for the rise of neoliberalism

[RaphaelDLG]

Was the global turn to neoliberalism in the 70s and 80s a organic process brought about by changes in the academy, a change in public sentiment, and a reaction to the excesses of government...

...or was the causality reversed and neoliberalism was something that was mainly astroturfed into existence over time by the forces of capital/special interests?

[Blue3]

First: define neoliberalism.

Second: perhaps with the generation born and raised into the Cold War finally beginning to come to power.

[The Mikado]

Was the global turn to neoliberalism in the 70s and 80s a organic process brought about by changes in the academy, a change in public sentiment, and a reaction to the excesses of government...

...or was the causality reversed and neoliberalism was something that was mainly astroturfed into existence over time by the forces of capital/special interests?

A lot of it is a result of the massive economic downturn of the 1970s, in degrees and manners simply unexplainable by prior models, and the total sense of stagnation and ineffectual responses of the governments of the 1970s (throughout the entire West, not just the Ford and Carter Administrations in the US, though they're both great examples). The general sense that people needed to try something new and that Keynesian models weren't addressing the problem really helped open the door up for new approaches.

Remember, the 1970s was characterized by: stagnant growth, high interest rates, high inflation, and high unemployment at the same time, coupled with staggeringly high energy costs due to the oil shock. That combination should've been impossible. Everything that could go wrong did go wrong.

[136or142]

Was the global turn to neoliberalism in the 70s and 80s a organic process brought about by changes in the academy, a change in public sentiment, and a reaction to the excesses of government...

...or was the causality reversed and neoliberalism was something that was mainly astroturfed into existence over time by the forces of capital/special interests?

A lot of it is a result of the massive economic downturn of the 1970s, in degrees and manners simply unexplainable by prior models, and the total sense of stagnation and ineffectual responses of the governments of the 1970s (throughout the entire West, not just the Ford and Carter Administrations in the US, though they're both great examples). The general sense that people needed to try something new and that Keynesian models weren't addressing the problem really helped open the door up for new approaches.

Remember, the 1970s was characterized by: stagnant growth, high interest rates, high inflation, and high unemployment at the same time, coupled with staggeringly high energy costs due to the oil shock. That combination should've been impossible. Everything that could go wrong did go wrong.

1.Real GDP growth in the 1970s is actually much higher than is generally believed.

I think the answer is 'all of the above' (depending on what neo-liberalism) means.  In reference to the 'Washington Consensus', all of the above.

At the organic level, there were changes in economic theory and changes in technology that favored private sector domination, but there was also a massive propaganda campaign by corporations and many in the media.  Ronald Reagan summed this up as 'government is not the solution, government is the problem.'

I can go in to more detail if anybody is interested.

[RaphaelDLG]

Was the global turn to neoliberalism in the 70s and 80s a organic process brought about by changes in the academy, a change in public sentiment, and a reaction to the excesses of government...

...or was the causality reversed and neoliberalism was something that was mainly astroturfed into existence over time by the forces of capital/special interests?

A lot of it is a result of the massive economic downturn of the 1970s, in degrees and manners simply unexplainable by prior models, and the total sense of stagnation and ineffectual responses of the governments of the 1970s (throughout the entire West, not just the Ford and Carter Administrations in the US, though they're both great examples). The general sense that people needed to try something new and that Keynesian models weren't addressing the problem really helped open the door up for new approaches.

Remember, the 1970s was characterized by: stagnant growth, high interest rates, high inflation, and high unemployment at the same time, coupled with staggeringly high energy costs due to the oil shock. That combination should've been impossible. Everything that could go wrong did go wrong.

1.Real GDP growth in the 1970s is actually much higher than is generally believed.

I think the answer is 'all of the above' (depending on what neo-liberalism) means.  In reference to the 'Washington Consensus', all of the above.

At the organic level, there were changes in economic theory and changes in technology that favored private sector domination, but there was also a massive propaganda campaign by corporations and many in the media.  Ronald Reagan summed this up as 'government is not the solution, government is the problem.'

I can go in to more detail if anybody is interested.

By all means

[136or142]

Was the global turn to neoliberalism in the 70s and 80s a organic process brought about by changes in the academy, a change in public sentiment, and a reaction to the excesses of government...

...or was the causality reversed and neoliberalism was something that was mainly astroturfed into existence over time by the forces of capital/special interests?

A lot of it is a result of the massive economic downturn of the 1970s, in degrees and manners simply unexplainable by prior models, and the total sense of stagnation and ineffectual responses of the governments of the 1970s (throughout the entire West, not just the Ford and Carter Administrations in the US, though they're both great examples). The general sense that people needed to try something new and that Keynesian models weren't addressing the problem really helped open the door up for new approaches.

Remember, the 1970s was characterized by: stagnant growth, high interest rates, high inflation, and high unemployment at the same time, coupled with staggeringly high energy costs due to the oil shock. That combination should've been impossible. Everything that could go wrong did go wrong.

1.Real GDP growth in the 1970s is actually much higher than is generally believed.

I think the answer is 'all of the above' (depending on what neo-liberalism) means.  In reference to the 'Washington Consensus', all of the above.

At the organic level, there were changes in economic theory and changes in technology that favored private sector domination, but there was also a massive propaganda campaign by corporations and many in the media.  Ronald Reagan summed this up as 'government is not the solution, government is the problem.'

I can go in to more detail if anybody is interested.

By all means

1.Keynesian economics failed to address the problem of inflation of the 1970s (starting in the late 1960s.)  Keynesian theory held that unemployment and inflation could not rise at the same time, they argued that a nation could have a little more inflation for a little less unemployment.  

Essentially the idea behind this was that due to the circulation of money, there was a fiscal multiplier effect to government spending.  The government would put money into the economy and due to it being spent multiple times, jobs would be created.

Monetarists showed that in normal economic times (i.e no recession) new money introduced into the economy without an increase in productive capacity (or output) would just result in inflation: "too much money chasing too few goods."  They showed "in the long run, the fiscal multiplier is zero" (or "dead" in the original quote.)

So, this change in economic theory removed the argument for governments to try to 'fine tune' the economy to reduce unemployment.

2.Changing technology.  I don't think people today appreciate the amount of government involvement in the economy prior to the 1980s.  The initial impetus of de-regulation, starting under President Nixon and continuing under President Carter, was to try to reduce inflation (it actually worked.)  The federal government, for instance, not only used to set the rates that long haul truckers charged, but they set the trucking schedules, the routes, and based on these, the number of drivers and companies as well.  The initial purpose was to increase competition in trucking to decrease trucking rates.

This deregulation actually occurred before changing technology. However, with the invention of such things as e-mail, spreadsheets, and the internet (pre world wide web) it became much easier for individual companies to do their own scheduling and so on, and coordinate it with the businesses that hired them.  This effected the airlines, led to 'just in time' inventory, containerization and probably a whole bunch of other things.

3.Starting in the 1960s, a number of right wing business people became concerned with the 'creeping socialism' in the United States and started campaigns to blame the government for all problems and to create concerns over loss of 'freedom.'  (I'd like to find out more about this myself.)  So, this led from 'government spending and deficits and trying to 'fine tune' the economy can be counterproductive' and 'regulations that dictate business conditions can stifle innovation' to the 'neoliberal' extreme of 'all social spending and unions are bad' and 'all regulations are bad' (or virtually all.)