Book SummaryThe Hidden History of Neoliberalism, by Thom Hartmann

1-Page Summary1-Page Book Summary of The Hidden History of Neoliberalism

The foundational concepts and theoretical framework of the neoliberal ideology.

Neoliberalism Arose Mid-20th Economists Ludwig von Mises and F.A. Hayek were leading proponents of the intellectual ideas of their era.

This section delves into the emergence of a new economic ideology, tracing its ascent to prominence in the middle of the 20th century and associating it with the economic concepts put forward by intellectuals like Mises, Hayek, and Friedman. Hartmann portrays their increasing disillusionment with the rise of authoritarian and collectivist governments, alongside their persistent skepticism regarding governmental meddling in economic affairs. They established a foundation for advocating the concepts of markets without regulation and minimal government intervention as solutions to societal issues.

Neoliberalism champions free markets, limited government, and property rights as essential elements for achieving liberty and affluence.

Hartmann emphasizes the conviction that the most efficient and fair method to distribute resources and encourage wealth growth is through the laissez-faire approach championed by the doctrine of neoliberalism. This philosophy posits that the enhancement of individual liberty and economic growth hinges on minimizing government meddling and ensuring strong safeguards for the rights to property. They argue that the market possesses intrinsic self-regulatory features that are substantially more effective than those of any regulatory agency. In the following sections, it becomes evident that these principles constitute the foundational basis upon which policies of neoliberalism have been applied worldwide.

Context

• Common neoliberal policies include deregulation of industries, privatization of state-owned enterprises, and tax cuts aimed at stimulating investment and economic growth.
• While proponents argue for self-regulating markets, critics highlight instances of market failures, such as monopolies and environmental degradation, where government intervention is necessary.
• The 2008 financial crisis and subsequent economic challenges have led to renewed debates about the effectiveness and consequences of neoliberal policies.
• The spread of neoliberal policies globally has often involved deregulation, with the belief that reducing barriers to trade and investment will lead to more efficient global markets.
• The shift towards neoliberal policies has been associated with significant changes in labor markets, including the rise of gig economies and a focus on individual entrepreneurship over collective bargaining.

They shifted their allegiance from democratic principles, embracing political systems like communism and fascism that upheld a capitalist structure under limited governmental control.

Hartmann goes further, uncovering that the founders of neoliberalism not only harbored doubts about democracy but also harbored a clear repugnance for it. He argues that within the inherent hierarchical structure of capitalism, democracy is perceived as a threat. Hartmann posits that state administrations, regardless of whether they are authoritarian or Marxist in nature, garnered backing when their strategies were in harmony with the aspirations of predominant ethnic factions or when they advanced the tenets of market liberalism. He cites the support of a particular economist for elements of Nazi racial ideology and the idea that global trade could be strategically used to exploit those deemed to be of lesser status as evidence. The book explores the profound consequences experienced by countries like Chile and Russia as a result of adopting neoliberal policies.

Practical Tips

• Explore the ethical dimensions of economic theories by evaluating the social consequences of different economic practices. Choose a current economic policy or practice, like the gig economy, and analyze its effects on various social groups. Consider factors like job security, wage levels, and working conditions, and reflect on whether the policy promotes social equity or exacerbates disparities.

Other Perspectives

• Neoliberalism has been adopted and adapted by democratically elected governments around the world, suggesting that it is not incompatible with democratic principles.
• The idea that democracy is a threat to capitalism may overlook the role of democratic governance in creating a stable environment for economic growth and investment.
• The support for state administrations could also stem from a lack of viable alternatives, public apathy, or the suppression of dissent, rather than an endorsement of their strategies.
• It is possible to argue that without the adoption of some neoliberal reforms, Chile and Russia might have faced even more severe economic stagnation or decline.

Neoliberalism Claims Free Markets Surpass Government...

The Hidden History of Neoliberalism Summary The widespread implementation and resulting impact of neoliberal policies.

First Experiment With Neoliberal Policies in Chile: Friedman and "Chicago Boys" Implemented Free Market Reforms Under Pinochet

Hartmann navigates his readers through the pivotal occurrences of 1973 in Chile, illustrating the way the austere regime under General Augusto Pinochet was at the forefront of adopting neoliberal tactics. After the US-backed removal of Salvador Allende, Milton Friedman and his colleagues from an esteemed academic institution in Chicago received full control to implement drastic free-market reforms, including privatizing state-owned enterprises, diminishing regulatory oversight, and substantially curtailing social welfare programs.

Economic Crisis: Inflation, Unemployment, Poverty, Elite Enrichment

Hartmann documents the disastrous consequences that ensued from this initiative. Chile's financial crisis was characterized by soaring inflation, increasing unemployment, widespread poverty, and a pronounced widening of the wealth disparity. The regime under Pinochet led to substantial financial gains for the upper class, while the average person in Chile encountered numerous hardships. This chapter issues a serious warning about the dangers of...

The Hidden History of Neoliberalism Summary Neoliberalism's influence has significantly reshaped the social and political contours within the United States.

During the Reagan administration, the focus shifted toward lowering tax rates, lessening regulatory scrutiny, reducing the power of labor unions, and scaling back on social welfare programs.

Thom Hartmann argues that the beginning of the Reagan administration marked a significant turning point for the United States, initiating an era dominated by neoliberal economic policies. Reagan's policies dramatically transformed the American economic scene through substantial reductions in taxes for affluent individuals, loosening industry regulations, and concurrently weakening the influence of labor unions as well as reducing social support initiatives.

The erosion of America's industrial base has led to a less stable middle class and an increasing disparity in the distribution of wealth.

Thom Hartmann argues that the decline of American manufacturing, the shrinking of the middle class, and the sharp increase in the gap between rich and poor are all results of economic strategies that began in the era of President Reagan. Thom Hartmann argues that diminished regulatory oversight and tax cuts for the wealthy led to the outsourcing of employment and a halt in wage increases for...

The Hidden History of Neoliberalism Summary Movements characterized by progressivism and populism have arisen to confront the dominant neoliberal policies.

Neoliberal Failures Fuel U.S. Populist Rise

Hartmann views the rise in American populism as a response to the perceived failures of neoliberal strategies and the growing sense among the American working class that they are being economically and politically sidelined. He posits that individuals such as Bernie Sanders from the progressive side and Donald Trump representing conservatives successfully harnessed this dissatisfaction by presenting populist options that challenged the dominant neoliberal agreement.

Public support has swelled for the populist and nationalist alternatives presented by Bernie Sanders and Donald Trump, which confront the prevailing economic framework responsible for widespread dissatisfaction.

Hartmann explores how Sanders and Trump, despite their differing ideologies, both connected with the populace's dissatisfaction over issues like income inequality, job losses, and the influence of corporate money in politics. While Sanders championed reforms that would lead to equitable economic policies and bolster social safety nets, Trump garnered support from conservative populists through his emphasis on economic nationalism and his outspoken...

The Hidden History of Neoliberalism Summary Proposals for establishing a more equitable economic system to mitigate the damage inflicted by neoliberal strategies.

The author's recommended strategy for economic development is inspired by the principles set forth by Alexander Hamilton.

Hartmann proposes a blueprint for establishing a more equitable economic and social framework, acknowledging the harm caused by policies founded on neoliberal principles. He champions the resurgence of an economic approach he calls "Hamiltonian," inspired by the vision of a strong, active government that plays a key role in fostering economic development and industrial growth.

The approach to strengthen local production included the introduction of import duties, allocation of financial incentives, and a deliberate strategy for industrial expansion.

Hartmann proposes revitalizing the United States' manufacturing base through the introduction of import duties, offering governmental financial assistance to domestic industries, and formulating a targeted industrial strategy that emphasizes crucial industries. These measures, he argues, would protect American jobs, rebuild the industrial base, and reduce dependence on foreign manufacturers. Hartmann underscores China's economic advancement as a testament to how government-directed growth can contest...

The Hidden History of Neoliberalism Summary The era in question is frequently referred to as the time of neoliberalism.

Neoliberalism Reflects the Struggle Between Concentrated Power and Equitable Resource Distribution

Hartmann portrays neoliberalism as a persistent struggle between the centralization of authority and the quest for a more equitable distribution of community resources. He argues that this conflict has spanned several centuries, shaping the modern structure of political and corporate systems.

The origins of the conflict can be traced back through the centuries.

Hartmann delves into the past to uncover how, throughout various ancient civilizations and empires, systems designed to accumulate wealth and power often resulted in the subjugation and misuse of the larger population. Thom Hartmann interprets neoliberalism as a modern manifestation of a recurring trend where a select few elites utilize their influence to shape economic and political structures to their advantage. Thom Hartmann argues that the focus on unregulated markets and reduced government oversight has resulted in a significant transfer of power to wealthy entities and individuals, thereby eroding the foundations of democracy and undermining collective support mechanisms.

Context

• In medieval...