It's EITHER/OR
I see that I really have to polish my series on neoliberalism.
Neoliberals have nothing to do with the liberal portion of the political spectrum in the US. In fact, they are strongly opposed to US liberals. US liberals are called "Labor" or "social democrats" in most other countries. "Liberals" are to right in most countries other than the US and they, as has been already pointed out, are opposed to the features of social democracy such as welfare, Medicare and Social Security.
Neoliberalism was founded as an academic economic school by two Austrian economists in 1936 as a competing school of economics to Keynesian economics. Austrian and the more mainstream neoclassical economics both took a serve beating for their inability to predict and to explain the Great Depression. They went back to the economics of the classical liberals, a political movement in England in the 1830's. The classical liberal empathized economic as well as personal freedoms, free markets and free trade, a true labor market where wages are allowed to both rise and to fall and a strict gold standard for money. In England they stopped open welfare, that is they reopened the poor houses and the debtors prisons.
If all of this sounds vaguely familiar, you are right. It is the very basis of our current political economics, if not yet the whole of our academic economics. It is is behind supply side economics, the idea that tax cuts pay for themselves, the theory of austerity as a way out of a recession, that the government should spend less to restore confidence in a recession that is pretty much by definition when everyone else is reducing their spending. It is nothing but warmed over Austrian/Libertarian economics, the fantasy of the self-organizing, self-regulating free market.
It is shit economics, a free market regulated by supply and demand setting prices down to cost of production of the marginal product, an economy that is supply constrained, where demand is desire and infinite and therefore isn't a factor in the exchange of goods, where wise investors coming together in an open, free stock market collectively decide which companies are winners and worthy of investment and which are losers and are starved of capital, in a word Econ 101.
In the world of ideas neoliberalism gained little against Keynesian economics until, largely through the efforts of the economist Milton Friedman of the University of Chicago, neoliberalism was brought to the attention of who were the neoliberals natural allies, the very wealthy of primarily, at least in the beginning, the US. Reference the Mont Pèlerin Society.
What neoliberalism lacked in support from historical precedent, in theoretical support and in applicability to the real world economy it more than made up for in the raw power of the money behind it. Because it is the wealthy who endow university teaching and research chairs and it is the wealthy who hire the university's graduate economists, slowly and largely unnoticed academic economics was pushed aside by this wealth friendly caricature of economics.
It has dominated our political economics, the economics that we base our economic policies on, since the late 1970's. It is reasonable to blame the problems that we have had since then on neoliberalism, problems such as the ever growing deficit and the Great Financial Crisis and Recession, since its supply side economics depends on tax cuts for the rich and the GFC&R was caused by banks using their newly granted ability, in the name of deregulation, to engage in reckless speculation with depositors money, as they have always done given the chance all through history. And yet, as I am writing this the neoliberal party in Congress is working to destroy the rather tepid Dodd-Frank reforms passed into law after the GFC&R, all in the name of deregulation and helping banks to make more loans. Because some perfectly reliable real estate developers now have problems getting loans, I suppose.
While liberals have been fighting the racism, homophobic, misogynous, all cultures are equal and gun control wars and conservatives have been defending those as personal prerogatives to be assholes in the interests of fighting social and cultural change, while battling among other horrors the war against Christmas and the scourge of flag burning. While so occupied both liberals and conservatives have suffered repeated defeats in a war that they didn't even realize was being waged on them, which they lost without even putting up a fight. This is it, the class war being waged by the wealthy to get all of the money. This is neoliberalism.
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The solution to the problem of constant wars can be easily solved. Just re-institute the draft, except this time draft the sons and daughters of the wealthy first. Call it the
noblesse obliges draft.