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Neoliberal myths

Fun to see what the Tuberosum Elyanum thinks defines neoliberalism:

There is money in the bank
Banks lend out other people’s money

Slightly self contradictory in those first two. If banks don’t lend out depositor money but people do deposit money in banks then there must be money in the bank.

Banks do in fact finance their loans with deposits. That’s why deposits plus capital always equal loans, as can be seen on any bank balance sheet.

Tax pays for spending

Resources deployed by government are abstracted from the economy. Tax pays for spending is a useful shorthand, no more.

Government debt has to be repaid

Yes, it does. Imagine the value of a gilt if government says that you, you darlin’ little saver you, will never get your capital back.

Growth is the be-all and end-all of the economy and nothing else matters

The purpose of an economy, of a civilisation even, is that more folk get more of what folk want. So, yes, growth is the aim.

Austerity is the right response to economic downturns

Can be. Worked damn well in 1932 after all.

Public services are black holes into which many is thrown

Sometimes. That which pays tubers to be professors might qualify.

Government spending can’t add to growth

Not even I believe that.

Money creation is bound to lead to inflation

Nonsense. As even Fridman pointed out, sometimes it will, sometimes it won’t. The question is, when? To the point that Friedman – St Milton himself – insisted that a growing economy required a growing money supply.

The government must balance its books

Some relationship would be useful, yes. A complete unhinging leads to Zimbabwe.

We can’t afford pay rise during inflationary periods

CEO pay is going up nicely so clearly we can.

Profit is a measure of anything useful

Profit is the measure of value added in an activity. The output is worth more, at market prices, than the inputs in their alternative uses according to market prices. Given that all of GDP is value added, incomes are value added, consumption is value added, profit’s actually a fairly useful little thing, yes.

And, well, carry on at your leisure. As the man doesn’t understand what neoliberalism is his critique is going to be weak tea, no?

18 thoughts on “Neoliberal myths”

  1. A few days ago, didn’t he claim that neoliberals aimed for something called equilibrium? Wouldn’t that imply that they are not fixated on growth?

  2. In the interests of ‘bulking out’ the number of straw men. Here are the other 5:

    Government is like a household

    This is an over simplification – something of which the potato seems very fond as complexity is the ideologue’s enemy…

    There is no such thing as society

    For someone who fell out with the Corbynite labour party he seems unusually attached to 80s myths. This was debunked 30 years ago. That he clings to it is perhaps a sign of how dated his thinking is.

    Our grandchildren will have to repay our debt

    This is an interesting one and I look forward to reading this. It’s quite possible that this might not be true. If Murphy’s policies were carried out the pound would suffer the fate of the Zimbabwean dollar and UK sterling denominated gilts would be worthless as they’d be written off. So he might actually be right here, but not for the reasons he’s likely to provide

    The national debt is a burden

    I know he had a ‘ringer’ take accountancy exams but surely even he can’t confuse debts with assets?

    We can no longer afford the NHS

    In its current form I’d say this is probably true – but again I’m intrigued by his reasoning. If we completely collapse the economy along the lines of Afghanistan, Lebanon or Zimbabwe we might be able to ‘afford’ the NHS but I’d argue that’s probably not the way to go.

    What I find interesting is as an undergraduate the ‘straw man’ fallacy was something I tried a couple of times, usually after a succession of nights on the lash had left me up against a deadline to submit something – I did it maybe on three occasions and got a supervised dressing down in each instance.

    Not to say it isn’t a technique I’d ever employ in my professional life but to see 20 or so of them as something worthy of being published in my late 50s/ early 60s I’d suggest says a LOT about him and how frankly intellectually limited his thinking is. It speaks volumes about the decline of higher education in the UK that he’d even be considered for a janitorial, let alone an academic post.

    That said I am reminded of a previous ‘Ragging’ post’s comment by a newer but excellent commentator, ‘Boddicker’ (hopefully named after the Robocop character played by the great Kurtwood Smith) who pointed out he has made a good career of playing people for Mugs.Even getting a new round of Apple technology at a couple of grand…

  3. “I know he had a ‘ringer’ take accountancy exams”: have a care, Kier old boy. If he penetrates your pseudonym he’ll sue.

  4. @V-P “”There is no such thing as society”

    For someone who fell out with the Corbynite labour party he seems unusually attached to 80s myths. This was debunked 30 years ago.”

    For those that don’t know, this line attributed to St Margaret was lifted from a VERY long interview and reading that part of the interview in full puts it in context.

    “I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations…
    … But it went too far. If children have a problem, it is society that is at fault. There is no such thing as society. There is living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate.”

    But of course, context is not something the Left have ever been too bothered with.

  5. Dearieme

    I’d be intrigued to see him in court – and he does know who I am as a close relative of mine is a co-author of Murphy’s (he’s why I have Spud’s books)

    It’s also why I was blocked ‘officially’ from the TRUK site for the accurate statement that he’d blocked 20,000 on Twitter.

  6. @Kier: well you are a lawyer, I suppose, so you could defend yourself. But wouldn’t the demands on your time deflect you from your duties as Leader of His Majesty’s Loyal Opposition? On t’other hand it would let you escape the company of that Angela Whatsherface.

    P.S. Did you know that “Steve” is actually Liz Truss?

  7. @Andrew C

    I’m continually reminded of JFK (scumbag) ‘ask not what your country can do for you, but what you can do for your country’ spiel.

    Try finding a liberal today even remotely suggesting self-reliance, let alone supporting oneself and giving back too.

  8. Bravo! to whoever got this past the amazingly unaware Spud after his list of ‘neoliberal myths’

    “Antonios Michael says:

    It would be worth adding a glossary entry for straw man.

    Richard Murphy says:

    Added to the list”


  9. Dearieme

    I’d heard Steve was Ramzan Kadyrov or Yevgeny Prigozhin so this is an interesting turn of events…

  10. Surely even Communist societies need to turn a profit on most production?

    An economy where transactions habitually take place at a loss would seem doomed to become North Korea pretty fast.

  11. @Chester – “Surely even Communist societies need to turn a profit on most production?”

    Have you looked at what happened to communist societies in the 20th century?

  12. Asian ones collapsed into chaos, often spectacularly.

    European ones merely grew much more slowly than their capitalist neighbours. But grew, they did.

    I wonder if the difference was that the Asian ones actually took communist economics seriously, whereas in the west it was only really ever a figleaf.

  13. @ Chester Communists set human life as the collateral for their investments which they are happy to pay with at the regular margin calls.

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