Neoliberalism, in the original sense of the word, won.
Everyone is a neoliberal now, except on the furthest fringes.
Markets are the most effective means of production and there's not good evidence that they can be technocratically managed in a positive way by the state.
The political question is not what to do about markets (and hasn't been for decades) because there is nothing to do. The question is to what degree should there be taxation and redistribution.
A lot of ideological argument on the right versus left is just kayfabe because everyone wants markets, everyone wants taxation, and everyone wants a large welfare state.
Leftists can pretend otherwise but it's just LARPing to try to seem like something other than what they are: neoliberals doing a performative schtick.
I believe this framework applies to most policy debates. The right isn't against electric vehicles. They are against the notion of climate change. The left isn't actually against permitting reform for infrastructure projects. They are in fear of losing their best weapon against fossil fuel advancement.
We can fight about the economics but what was frustrating to me about the greedflation interlude was how dumb it was politically. Recall where we were when people like Elizabeth Warren and AOC brought it up: they were frustrated that Democrats weren’t getting enough credit for an economy that was generating a lot of growth and jobs because people were angry about inflation. So (I guess) the idea was you blame inflation on greedy corporations and suddenly people will like Democrats more?
But it was all purely performative- as many have pointed out- the only alternative to “greedflation” are shortages- and it’s very hard to think that would have been politically better. The whole thing was just disappointing.
💯 💯 💯 Freddie, why did I only discover you (from Coleman Hughes’ podcast) within the last year? Maybe bc, even though you speak my language, I never felt like I fit into the culture of the far left (bc it looked like a closeted-academics-just-trying-to-win-in-academia and anti-religious for me) and I remained outside of that circle with my ex-haredi Jewish friends? Or have you just started branching out more? Anyway, another great article to articulate my thoughts exactly, thank you, thank you 🙏
It pays to separate inflation from price hikes due to an organic scarcity of a certain good or goods, and inflation as a monetary phenomenon caused by terrible monetary policy.
The worst inflation is always caused by currency devaluations where the supply of cash basically exceeds the amount of things to buy with it. Throwing trillions of "free" dollars at people during the C19 years did exactly this - way more money out there to spend - but the supply of goods to buy with it constricted as the economy ground to a halt during shutdowns. Goods and services became scarcer as a result of monetary policy here - it was not some sort of coincidence or unforeseeable outcome.
"Greedflation" has always been cope, and the dishonest cynicism with which that excuse was floated by both the White House and Fed to distract from their own hopelessly inept policy of printing money was infuriating.
Even if "corporate greed" were the cause of inflation (as if corporations only just now discovered greed) - what is anybody going to do about it, keeping in mind that corporations have legislatures and the executive as neutered declawed domestic pets?
Do you read Matt Stoller at all? I'm probably not doing it justice, but I thought the argument about greedflation was more about pointing out how consolidated many of the markets in our economy really are. And that with healthy competition, many corporations would not have been able to use the cover of the initial inflation to raise prices as much as they did.
"Can the market mechanisms that create inflation and the corporations that profit off of it coexist with justice and human flourishing?"
Remember the old admonitions to first defining your terms and to not assume your conclusion? What do "justice" mean and "human flourishing" mean? The greatest good for the greatest number? The least suffering for the least among us? The highest peak achievement possible for some member of the species? Individual outcomes perfectly matched to individual merit--"just" deserts?
"If Profitable Company that actually charged X dollars for their product had instead charged <X dollars, while still charging enough to remain in business," and "corporations just don’t do that, that their natural market behavior is to maximize profits...."
Why should any organism--physical or virtual, individual or aggregate--behave in such a way? What normal human does just enough to survive and no more? Do we not seek pleasure, too? Whether it's more food, greater comfort, better companionship, stronger stimulation, or deeper thoughts? Why should mere avoidance of death be the only acceptable objective, for anybody, including a corporation, which is at bottom nothing more than a group of human beings who have associated to pursue together a set of common human ends? Does Freddie DeBoer write just enough to keep from starving, and not a word more?
I think you're right, Freddie, to write that these disputes are merely refractions of the underlying disputes about human nature and the right way to order society. And I think the reason that the left and the right wind up talking past each other is that they are both wrong. Both are seduced by the need to reduce the unsatisfying complexity of the human condition to a simpler model. Neither capitalism nor Marxism adequately capture how things work or how they might be made better, once "better" is adequately defined. It's sad, it's a pain in the ass, but complicated arrangements of greys--social democratic, hybrid economic, pluralistic, that kind of nasty real-world stuff--is the only way grownups should think and talk about these adult topics...
*Hubert Humphrey (not "Humbert"). (I assume that was a typo rather than Freddie knowing something sordid that I don't know about Humphrey, but I'm pretty sure he doesn't deserve that association!)
This is a very black or white framing of the issue that over demonizes the "market". I'm going to go out on a limb and guess that Bob Reich would be delighted if the US switched over to the Swedish model of economic development. I'm also going to make a guess that he would not like to see the US become a command economy like the Soviet Union where the gini would be lower simply by virtue of making everybody far poorer. But the fact is that in Sweden there are plenty of corporations and all of these corporations are profit maximizers just like in the states. So my conclusion would be that Bob Reich wouldn't claim to be against the market per se and he wouldn't claim to oppose profit maximization. Rather, he would be opposed to the way in which we currently regulate the market and organize our tax system. At the same time he's pro-greedflation because he's a lawyer and not an economist (or he's just playing politics). Either way your market/justice dichotomy does not hold.
I think having the argument about greedflation IS having "the real argument" to a greater extent than you give it credit, because arguing, "Are markets good or bad for society?" is impossible without having a bunch of smaller subarguments about various aspects. In this post, you say markets are bad because they exploit labor, or, if you don't buy that, because they harm the environment. Those are very different arguments! I could give counterarguments to both, and they'd be non-overlapping. Calling them the same argument because in both cases I'm on the "market good" side and you're on the "market bad" side obscures more than it clarifies. "Having the real argument" means having a bunch of small arguments about portions of the main argument all the time. I'll grant arguing about greedflation is a particularly minor, non-essential, and easily refuted subargument, so it feels a little like your real request is, "have the subarguments where my side has a better case."
It's interesting how socialists think that other people should just take less than the market price out of some vague sense of...something. This basic refusal to live in the reality of human nature is why socialists have been and will always be disappointed. The path to prosperity is to harness the price signals, not rail against them and wish that they were different. It's just another wish to fix prices, the eternally wrong obsession of those who just will not accept how the world works.
Really interesting article. Speaks a lot to what is happening in the UK at the moment too. We're seeing (right/centre-right) talking heads on the TV telling the public not to ask for pay rises because it will cause inflation. How we should all be ready to tighten our belts and weather the economic storm.
Meanwhile, our privatised water companies are on the verge of collapse because they've spent decades paying out billions to shareholders and building up debt, instead of investing in infrastructure . So they're literally pumping shit into the rivers and sea on a daily basis, failing to fix leaky pipes, sometimes failing to provide even a modest level of service. Again, all while CEOs and shareholders are taking home huge sums of cash. And they tell us that if we want them to fix the pipes and stop pumping shit into our rivers, they'll need to put bills up again.
It's easy to look at this and think 'hey actually, it's their corporate greed causing inflation, not my 1.5% pay rise in my desk job.' But one positive is that more and more people - not just the left, but across the spectrum - are calling for water companies to be renationalised. Because even the true-blue home counties types can see that local monopolies that take in huge sums of money and then deliberately fill beauty spots with sewage signify a broken system.
Sorry but there's nothing to argue about.
Neoliberalism, in the original sense of the word, won.
Everyone is a neoliberal now, except on the furthest fringes.
Markets are the most effective means of production and there's not good evidence that they can be technocratically managed in a positive way by the state.
The political question is not what to do about markets (and hasn't been for decades) because there is nothing to do. The question is to what degree should there be taxation and redistribution.
A lot of ideological argument on the right versus left is just kayfabe because everyone wants markets, everyone wants taxation, and everyone wants a large welfare state.
Leftists can pretend otherwise but it's just LARPing to try to seem like something other than what they are: neoliberals doing a performative schtick.
I believe this framework applies to most policy debates. The right isn't against electric vehicles. They are against the notion of climate change. The left isn't actually against permitting reform for infrastructure projects. They are in fear of losing their best weapon against fossil fuel advancement.
We can fight about the economics but what was frustrating to me about the greedflation interlude was how dumb it was politically. Recall where we were when people like Elizabeth Warren and AOC brought it up: they were frustrated that Democrats weren’t getting enough credit for an economy that was generating a lot of growth and jobs because people were angry about inflation. So (I guess) the idea was you blame inflation on greedy corporations and suddenly people will like Democrats more?
But it was all purely performative- as many have pointed out- the only alternative to “greedflation” are shortages- and it’s very hard to think that would have been politically better. The whole thing was just disappointing.
💯 💯 💯 Freddie, why did I only discover you (from Coleman Hughes’ podcast) within the last year? Maybe bc, even though you speak my language, I never felt like I fit into the culture of the far left (bc it looked like a closeted-academics-just-trying-to-win-in-academia and anti-religious for me) and I remained outside of that circle with my ex-haredi Jewish friends? Or have you just started branching out more? Anyway, another great article to articulate my thoughts exactly, thank you, thank you 🙏
It pays to separate inflation from price hikes due to an organic scarcity of a certain good or goods, and inflation as a monetary phenomenon caused by terrible monetary policy.
The worst inflation is always caused by currency devaluations where the supply of cash basically exceeds the amount of things to buy with it. Throwing trillions of "free" dollars at people during the C19 years did exactly this - way more money out there to spend - but the supply of goods to buy with it constricted as the economy ground to a halt during shutdowns. Goods and services became scarcer as a result of monetary policy here - it was not some sort of coincidence or unforeseeable outcome.
"Greedflation" has always been cope, and the dishonest cynicism with which that excuse was floated by both the White House and Fed to distract from their own hopelessly inept policy of printing money was infuriating.
Even if "corporate greed" were the cause of inflation (as if corporations only just now discovered greed) - what is anybody going to do about it, keeping in mind that corporations have legislatures and the executive as neutered declawed domestic pets?
Do you read Matt Stoller at all? I'm probably not doing it justice, but I thought the argument about greedflation was more about pointing out how consolidated many of the markets in our economy really are. And that with healthy competition, many corporations would not have been able to use the cover of the initial inflation to raise prices as much as they did.
Is there an origin story to the Freddie- Yglesias beef?
So much to unpack. Starting from the bottom:
"Can the market mechanisms that create inflation and the corporations that profit off of it coexist with justice and human flourishing?"
Remember the old admonitions to first defining your terms and to not assume your conclusion? What do "justice" mean and "human flourishing" mean? The greatest good for the greatest number? The least suffering for the least among us? The highest peak achievement possible for some member of the species? Individual outcomes perfectly matched to individual merit--"just" deserts?
"If Profitable Company that actually charged X dollars for their product had instead charged <X dollars, while still charging enough to remain in business," and "corporations just don’t do that, that their natural market behavior is to maximize profits...."
Why should any organism--physical or virtual, individual or aggregate--behave in such a way? What normal human does just enough to survive and no more? Do we not seek pleasure, too? Whether it's more food, greater comfort, better companionship, stronger stimulation, or deeper thoughts? Why should mere avoidance of death be the only acceptable objective, for anybody, including a corporation, which is at bottom nothing more than a group of human beings who have associated to pursue together a set of common human ends? Does Freddie DeBoer write just enough to keep from starving, and not a word more?
I think you're right, Freddie, to write that these disputes are merely refractions of the underlying disputes about human nature and the right way to order society. And I think the reason that the left and the right wind up talking past each other is that they are both wrong. Both are seduced by the need to reduce the unsatisfying complexity of the human condition to a simpler model. Neither capitalism nor Marxism adequately capture how things work or how they might be made better, once "better" is adequately defined. It's sad, it's a pain in the ass, but complicated arrangements of greys--social democratic, hybrid economic, pluralistic, that kind of nasty real-world stuff--is the only way grownups should think and talk about these adult topics...
*Hubert Humphrey (not "Humbert"). (I assume that was a typo rather than Freddie knowing something sordid that I don't know about Humphrey, but I'm pretty sure he doesn't deserve that association!)
This is a very black or white framing of the issue that over demonizes the "market". I'm going to go out on a limb and guess that Bob Reich would be delighted if the US switched over to the Swedish model of economic development. I'm also going to make a guess that he would not like to see the US become a command economy like the Soviet Union where the gini would be lower simply by virtue of making everybody far poorer. But the fact is that in Sweden there are plenty of corporations and all of these corporations are profit maximizers just like in the states. So my conclusion would be that Bob Reich wouldn't claim to be against the market per se and he wouldn't claim to oppose profit maximization. Rather, he would be opposed to the way in which we currently regulate the market and organize our tax system. At the same time he's pro-greedflation because he's a lawyer and not an economist (or he's just playing politics). Either way your market/justice dichotomy does not hold.
I think having the argument about greedflation IS having "the real argument" to a greater extent than you give it credit, because arguing, "Are markets good or bad for society?" is impossible without having a bunch of smaller subarguments about various aspects. In this post, you say markets are bad because they exploit labor, or, if you don't buy that, because they harm the environment. Those are very different arguments! I could give counterarguments to both, and they'd be non-overlapping. Calling them the same argument because in both cases I'm on the "market good" side and you're on the "market bad" side obscures more than it clarifies. "Having the real argument" means having a bunch of small arguments about portions of the main argument all the time. I'll grant arguing about greedflation is a particularly minor, non-essential, and easily refuted subargument, so it feels a little like your real request is, "have the subarguments where my side has a better case."
It's interesting how socialists think that other people should just take less than the market price out of some vague sense of...something. This basic refusal to live in the reality of human nature is why socialists have been and will always be disappointed. The path to prosperity is to harness the price signals, not rail against them and wish that they were different. It's just another wish to fix prices, the eternally wrong obsession of those who just will not accept how the world works.
Really interesting article. Speaks a lot to what is happening in the UK at the moment too. We're seeing (right/centre-right) talking heads on the TV telling the public not to ask for pay rises because it will cause inflation. How we should all be ready to tighten our belts and weather the economic storm.
Meanwhile, our privatised water companies are on the verge of collapse because they've spent decades paying out billions to shareholders and building up debt, instead of investing in infrastructure . So they're literally pumping shit into the rivers and sea on a daily basis, failing to fix leaky pipes, sometimes failing to provide even a modest level of service. Again, all while CEOs and shareholders are taking home huge sums of cash. And they tell us that if we want them to fix the pipes and stop pumping shit into our rivers, they'll need to put bills up again.
It's easy to look at this and think 'hey actually, it's their corporate greed causing inflation, not my 1.5% pay rise in my desk job.' But one positive is that more and more people - not just the left, but across the spectrum - are calling for water companies to be renationalised. Because even the true-blue home counties types can see that local monopolies that take in huge sums of money and then deliberately fill beauty spots with sewage signify a broken system.