Throughline - Capitalism: What Is It?

Episode Date: June 24, 2021

What do we mean when we talk about capitalism? Our economic system might seem inevitable, but it's a construction project hundreds of years in the making and no part of it is natural or left to chance. This week, we kick off our series on the past, present and future of capitalism with Kristen Ghodsee, Vivek Chibber, and Bryan Caplan, who debate how an economic system became an all-encompassing force that rules our lives and our minds.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Support for this podcast and the following message come from Autograph Collection Hotels, with over 300 independent hotels around the world, each exactly like nothing else. Autograph Collection is part of the Marriott Bonvoy portfolio of hotel brands. Find the unforgettable at AutographCollection.com. Full disclosure, we have never done something like this before on ThruLine. I'm the first to say it could be a lot better. And it would be better by being more capitalist. Brutal, dog-eat-dog, cutthroat capitalism.

I grew up in the Midwest where I always believed capitalism was one of the best things in the world. Capitalism, to me, is a powerful human story. If we could just bring people from 500 years ago to the present and show them what people managed to be unhappy about, they would be so confused. I've had about 10 jobs since I graduated high school, and each time I am constantly in fear of losing my job. The corrosive level of anxiety and the increase in inequality,

I think is going to erode the fundamental principles of democracy. I'm not sure I like capitalism anymore. In this conversation today, if we don't start with the premise that there is a deep social and political crisis in this country, this conversation is useless.

It is our biggest success and our biggest failure. I'm Ramteen Arablui. I'm Randa Bin Fattah. And on this episode of ThruLine from NPR, we're trying to do something a little different. Our team has been thinking about capitalism a lot these days. It's hard not to when so many people are struggling just to get by. A lot of people are actually quite pissed off

about the world we live in. Capitalism is an economic system, but it's also so much more than that. It's become a sort of ideology, this all-encompassing force that rules over our lives and our minds. And it might seem like it's an inevitable force, but really it's a construction project that took hundreds of years and no part of it is natural or just left to chance. So over the next few episodes, we're going to retrace that construction project to find answers to some questions that we've been having and maybe some of you have been having. Like, what do we really mean when we talk about capitalism? What are the rules and how have they changed? Why do so few people have so much and so many people have so little? How do we get to the place where we believe that if you succeed, that's on you, and if you fail, that's also on you?

To kick off this series, we wanted to start with a conversation between three different guests who have different perspectives on how to answer those questions. Here with us in our virtual Zoom studio is Kristen Gotsi, professor of Russian and East European Studies at the University of Pennsylvania. Kristen, welcome. Hi, thanks for having me. Also with us is Vivek Chibber. Vivek is a professor of sociology at New York University. Welcome, Vivek. Hi, thank you. And finally, we're joined by Brian Kaplan, Professor of Economics at George Mason University and an adjunct scholar at the Cato Institute. Thanks for joining us. Delighted to be here. Awesome. So happy to have y'all. All right. So obviously this is a huge, massive topic. So we're going to kind of try to start by defining

some terms and then drill down a little bit. So for the last few weeks, we've been asking listeners to write in with an answer to like a pretty simple question, which is what is capitalism and how does it affect your life? Vivek, how would you answer that question? What is capitalism and how does it affect your life? Well, capitalism, of course, people use it in different ways and has different meanings to different people. But in order to be able to have a meaningful conversation about it, you have to pin down some definition that people can agree upon. Most everybody agrees that capitalism has something to do with markets and with the importance of exchange and money and buying and selling things. In addition to that, there's a very widely held definition that what makes an economy truly capitalist is when there's a market not just for goods,

but also for labor services. So once you have a labor market, and most everybody has to work for a wage in order to survive, and then use that money to buy the goods that they need or the services that they need by which to survive, now you've got capitalism. It's a quite recent phenomenon in human history. Brian? Yeah, so what is capitalism and how does it affect me? So I say there's two different ways

you can think about capitalism. One is that capitalism is just the name we give to the status quo economic systems in countries like the United States, the United Kingdom, Canada, Australia, the countries that come out on the list of the most capitalist countries in the world. And I think when people talk about capitalism, usually they're kind of thinking this. It's just whatever's going on in those countries. And that's one okay definition, but I think it's more constructive to think about capitalism as

an economic system where you have free markets and private property, and these are the overwhelming method of producing goods. Of course, when you think about it this way, actually, even those countries I named aren't really all that capitalist. They're more capitalist than others. But still, in all those countries, the United States, just to start, government plays an enormously large role. And a lot of what I'm going to be saying is that there are a lot of problems with the existing systems, but the most pressing problems really come down to having too little capitalism, not too much. And this is a system that produces, for all of its faults, an enormous mountain of stuff at very low prices, which enables us to go and

have living standards that are far beyond almost anything that even the monarchs of earlier periods could ever have hoped to have. So, I mean, like at the beginning when you're talking about how so many have so little, I'd say I'm really very puzzled by this. At least in capitalist countries, the average person has a living standard that would have compared very favorably to Louis XIV of France. In terms of the quality of entertainment or health or food, it's all way better than most people throughout history could ever have imagined. Kristen, what are your thoughts? Yeah, so, I mean, there's this other side of capitalism. It is a system which essentially is underpinned by the unpaid labor of women and other caregivers in the home. And so as a woman and as a mother, I'm much more interested in the things that capitalism exploits without actually truly properly valuing them, particularly care work. I also think capitalism is a system constantly looking for ways to increase the profits for the people who are in charge of

running the economy or in charge of the private property or owners of the private property. And so that means that things that were previously outside of the market, like dating, like our affections, our attentions, our emotions, increasingly become commodified in a system that is constantly looking for ways to increase profits. And as Brian said, you know, you could make the argument that we're not capitalist enough, but obviously many people think that we're way too capitalist, right? And what we need is to actually rein in some of the free market fundamentalist ideology, which has led us down a path where a lot of people are pretty miserable. Now, I agree to a certain extent with Brian that, you know, in terms of the old French kings or whoever you want to talk about in the past, our lives are much better just in absolute

terms. But I think that there are certain issues that we need to talk about, like inequality, like the erosion of public trust, like the declining fertility rate, like the rise in depression and what has been called deaths of despair, that are also the negative outcomes of this economic system, which really does in the end put profits before people. Hi. Hi, this is Chris from Chicago. Hello, my name is Fatima. My name is Melanie. I'm from Southern California. Capitalism to me is an economic system, but it's also a culture. I feel that it's a very safe system. The end result is always

how much money are they going to make and how quickly are they going to make it. I guess capitalism is a giant force that I don't understand. When we come back, how capitalism works or doesn't work in our everyday lives. This is Jim Walker from Curlingwood, Texas.

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T's and C's apply. Ramteen, if you were to describe American capitalism in sort of like images or snapshots, what comes to mind off the top of your head? Go. I think of a Saturday afternoon in the summer at a mall, like at a suburban mall in the food court. That like, I don't know, that smell of the air conditioning, the people walking in with their bags full of things that they just bought. And there's eating at these like, you know, these food chains that are in the food market. It's kind of the quintessential american capitalist moment in my mind yeah i mean i'm from jersey so you know i know about the malls there's a there's this new mall by the way called the american dream mall in jersey that uh that is the second largest mall in the country oh my god perfect it's a perfect name exactly right um and you know like

what is it that makes american capitalism distinct if it is even distinct is it like uniquely individual uniquely efficient uniquely cutthroat right like these are all the things that we've been thinking about a lot and that's why we brought these three guests together right each of them come at this from a really different point of view. Right. Brian Kaplan's an economist and adjunct scholar at the Cato Institute. Vivek Chibber studies Marxist theory and historical sociology. And Kristen Gatze is an expert in what happened after the fall of communism in Russia and Eastern Europe.

Okay, now let's head back to the Zoom studio. Do you think, Kristen, do you think there's something particularly distinctly American about American capitalism? I mean, I think that we, you know, there's this whole idea of American exceptionalism and the kind of frontier, pull yourself up by your bootstraps, Horatio Alger myth of the American capitalist dream, right? I do think we tend to have much more faith in the ability of markets to solve all of our problems, or at least to take responsibility for both our successes and our failures, as you mentioned in the intro. A place like Denmark, 86% of the population thinks that most people can be trusted. But in the United States,

that's only 58% in 2020. So that's an awful lot of people out there who just are very suspicious and distrustful of each other. And I think ultimately, that is the result of a kind of brutal dog-eat-dog, cutthroat capitalism that we have in the United States. The French, you know, they like to make this distinction between cuddly capitalism and cutthroat capitalism, or capitalism sauvage, right? Savage capitalism. And I think we have that. So I know the happiness data pretty well. What you can see in happiness data is that all the rich countries are bunched up very high. Denmark comes out higher than the United States. But the idea that people in Denmark are super happy and we're

miserable is just crazy. Now, of course, you might say, but don't you want to say, Brian, that the people in the more capitalist countries are even happier? I guess I would like to say that, but that doesn't seem true. What I really say is that the actual effect of material conditions on human happiness has its limits. And a lot of people are unhappy even when they have all of their not just needs, but their material wants met. And this is something that has been understood by Epicurus 2,500 years ago, and modern psychology has really confirmed it. But there's two ways to judge the normative worth of an economy. One is you compare it to what the past was and whether or not the badly, because while lots and lots and lots of wealth is generated, it's all concentrated at the top.

And the poor do much worse than they could be doing if there was more equitable distribution of that income. That equitable distribution does not have to come at the expense of productivity. That's a myth. It's to come at the expense of productivity. That's a myth. It's entirely consistent with high levels of productivity. So I think that's the savagery, as Kristen said, of American capitalism. And that's what is producing the political crisis and the social crisis that we are all engulfed in today. I mean, I do agree with Vivek that we should compare it to what could be. Although there again, you can either say, let's go and try to redistribute more and hope this doesn't cause any problems with production.

And I think that's very reasonable. I think it would cause problems with production. If you look at where economic growth comes from, it comes very heavily from new companies that are heavily driven by people who want to become billionaires and change the world. And those people do a lot for the world. Yeah, if I could just jump in real

quick, we actually have good evidence that this sort of inequality in our country is actually making people more risk averse. So in 2014, business startups were at a 40-year low in this country because people feel so incredibly precarious in our economy that they're not willing to take the kinds of risks that will generate the sorts of productivity that you're talking about. And then the other thing I just wanted to say is happiness data on subjective well-being is one thing to talk about. But we're talking here, and I was speaking specifically about public trust and social trust and talking about rise and suicide and depression and anxiety and despair. That is very, very corrosive to people, whether or not you have air conditioning and a car and all of the wonderful toys that, as you did point out, are much cheaper in a capitalist

society because we have lots of fun little goodies that we can buy if we can afford it. And if we can't afford it, we can always put it on a credit card, right? The corrosive level of anxiety that is a result of the precarity of our economy and the increase in inequality, I think is going to erode, right, the fundamental principles of democracy, which I think is a big part of the discussion about inequality and the failures of capitalism in the contemporary moment. To me, it gets at something that like, it goes beyond theory, right? I mean, because we started out by talking about capitalism in terms of these things that we can debate in the abstract, but then, you know, we got all these responses from listeners who are really just struggling to get by to the next day.

And so I want to kind of get into their headspace a little bit and actually share one voicemail. My name is Jade. I'm from New Orleans. I'm a behavioral health nurse. I guess I'll say that capitalism is the reason why I break out into tears, whether it's for feeling overwhelmed by student loan debt or it's for remembering the first wave here. I actually understood what it means when people say, you're a cog in the machine. When I slept in another room, separate from my wife, because I didn't want to kill her, where I felt obligated to show up to work, not because of my professional duty as a nurse, but because if I stop working within a month, all that we have is gone. So what does it mean for my life? Capitalism

means that I don't get one, that I don't get choices, that I don't get to decide. It means that I've got to show up to work, even if work kills me. You know, I would just love to hear what your response to Jade would be. Somebody who is kind of looking at this system and saying, it's not working for me. So let me take that.

So I mean, there's the unhelpful thing to say, which is still probably true. And then there's the more helpful thing. I mean, the unhelpful thing is that a lot of human beings are just very negative. And no matter how good the world is, they'll find something to complain about. I mean, like if you could just bring people from 500 years ago to the present and show them what people managed to be unhappy about, they would be so confused. It's like you have really no actual complaints and yet you're still unhappy. So like a lot of the complaints that people have about capitalism, really those same people, if you put them in a socialist economy, they would find things to

complain about there. Now that's not very helpful, although it's just worth realizing that no matter how good things get, there's some people that are going to say that they're unhappy and they're going to find fault with things. Now, in terms of being constructive, this is where I would say, all right, well, look, there's a wide range of different kinds of jobs you can have as a nurse. And why don't we go and try to constructively find an option that looks better for you? And this really is how people in the real world turn their lives around. It's not by either saying things are hopeless or I'm going to hold out for perfection. It's taking what you can get for a while and then keeping your eyes open for opportunities. And this really is how almost everyone who is content with their lot in life has proceeded. So that's the pep talk I

would give. Brian, I don't think you gave a serious answer to what she said. You gave an answer that's kind of a catch-all. It's an answer that's appropriate to any situation. There's a very simple principle in social science. Well, here's the thing. She didn't airily say, I'm unhappy and I want a better life. She said some very specific things about lacking any kind of power in her working conditions, lacking having a say in what her hours are, in feeling like the necessities of life that she needs are not provided to the point where she

sees a loved one as a burden. Now, maybe these are all simply psychological issues that she has, but there's a simple test that any social scientist has to put up, which is, are the maladies and the liabilities that she's describing, are they a social fact or are they specific to her? If they're a social fact and they're generally true of the people in her situation, then you can't say to her, hey, look, you're just unhappy, or hey, look, you just need to work harder and try harder. It turns out that nurses today are amongst the occupations that have the most unionization drives and are trying hardest to have some kind of collective bargaining over their

occupation. Why? Because nurses in particular are working, A, ungodly hours. B, those hours are completely unpredictable. Nurses are at the front line of what's called flex work, where week to week, they don't know what they're going to be working, what their hours are going to be. And so in COVID, that all went on steroids. And it's not surprising that she is, as you said, especially unhappy because of that. But this is not COVID induced. The structural situation of nurses right now is dire. Now, if you expand outward, that's a skilled occupation. If you go into the bulk of the American labor force,

which does not have the benefit of being able to have some bargaining power because of their skills, the situation she describes is actually worse. Well, so I am going to have to dispute a lot of that. In terms of nurses, there is clearly a wide variety of different kinds of jobs for nurses. There are nurses that have a nine to five job, right? And my advice to someone who is stressed out by having irregular hours is try to get one of those other nursing jobs. If they say, you know, I've tried, I haven't done it. Well, you keep trying, right? That's what people have to do in real life. The world doesn't hand you the ideal conditions and there's no society that can. You know, it just seems like there's a lot of hyperbole about how miserable people are. You know, again, as I said, I'm not saying things are as good as they could be. What I will say is that there are very different policy changes that we

can make. The main one's in a capitalist direction. So what about letting more people move from the third world to the first world to get a job? I actually favor open borders and letting anyone take a job anywhere. Why is that not on your agenda? Or just letting people build more houses so housing is more affordable. These are very simple things. It seems like they would have job anywhere. Why is that not on your agenda? Or just letting people build more houses so housing is more affordable. These are very simple things. It seems like they would have broad appeal, right? So I don't see, it seems like I should be able to agree with them. You should be able to, so why not? Can I just say something here? In principle, there should be open borders. If capital can move across borders more or less freely, especially in North America today,

people should certainly be allowed. Great. In principle. Now there's the mechanics of how you actually work that out, whether it's politically feasible, whether it's administratively feasible, but Brian and I will agree on that. As for housing, yeah, there needs to be a lot more housing, but he and I would have different prescriptions. I think there should be enormous expansion of public housing because I think housing should be a right and not something you buy on the market. And some of the most amazing successes we've seen in housing policy around the world is through public housing, not just in Sweden, not just in Denmark, but in Hong Kong, in Singapore. These are countries that are always often extolled as being hyper-capitalist.

I just wanted to come back to Jade and point out something that I think is really interesting from a kind of abstract point of view, which is to say that she needs an attitude adjustment, that some people are just negative, and that that may be true, right? But that's sort of akin to saying it's all in your mind, which is a classic move of capitalism. There's a wonderful book by Mark Fisher called Capitalist Realism, which specifically talks about the ways in which the ideology of capitalism that we were talking about earlier devolve responsibility for systemic failures onto the individual. And so Jade is right to be blaming capitalism because the pain and frustration

that she feels is not in her mind. It's real. It's being shared by lots of other people. And she is at a structural disadvantage because it's not that easy to pick up and find another job. If she quits her job, she says everything she has will be gone in a month. You should not lose access to medical care if you quit your job. You should not lose your house, right? You should not feel compelled to work during a pandemic because otherwise you lose everything you have. When we come back, the complicated origins of American capitalism. Hi, this is Dan from Pittsburgh, Pennsylvania, and you're listening to ThruLine for NPR. We'll be with you, Vivek. Well, that's an ambiguous question. The story of American capitalism, you could say,

begins with the story of America, the colonization of America. And so that's one answer to the question. But of course, when the United States was colonized, when the settlers first came in, they didn't initiate a capitalist economy. That took some time to get going. In the North, the transition to capitalism, I think, comes about earlier than in the South. It starts through agriculture, which was family farms and family farms producing for the market quite early on. So that by the 1740s and 50s, you're starting to get a quite consistent market economy. And certainly by the time of the American Revolution, the North, I would say, is more or less capitalist. The South takes longer. In my view,

the slave plantations in the early 19th century are a kind of capitalism. They're basically market dependent. And even though there wasn't formally a labor market, the way in which the owners of slaves were able to change what we might call wage levels and labor allocations on the plantation kind of mimicked a labor market. So there's debate on this. But, you know, I would say somewhere around 1780 to 1820 is when we're talking about the United States becoming capitalist in the North and the South. And that makes the United States an early capitalist economy. At that point, I think you only outside in the rest of the world, you have England and you have Holland that are basically capitalist.

The rest of Europe is still not capitalist. And nowhere in the global south do you have capitalism at that point. Kristen, do you have, do you agree you have anything to add there? Yeah, I mean, the only thing that I would add, generally speaking, that chronology seems accurate to me. I would just say, though, that you have to put the beginning of American capitalism with the genocide of the Native American population and with slavery. I think you have to understand that the actual capital, it comes from a pretty important, long period of expropriation of land and labor from people who were not justly compensated. Brian?

Right. So I'm tempted to say it's a meaningless question because it's all on a continuum. So at what level on a zero to 100 scale do you have to get it before you say you're a capitalist country? If you really did twist my arm, I would say after the abolition of slavery. So 1865, that's where capitalism in America starts. And I'm kind of tempted to say that it ends in 1924 when there are permanent regulations on immigration. You think it ended? I'm tempted to say that. Unfortunately, the decision was made back then to say that we don't

want people from other countries here and to move not in the direction of capitalism, but the direction of nationalism. It's almost impossible to underestimate how important regulation of immigration is as a deviation from free market principles. So if you just think about how different our economy would be if anyone on earth could move here and get a job, and I say it would have been much better. We would be a country of a billion plus people enjoying the highest living standards in human history

and sharing that with the world and being a model to the rest of the world of what free markets really can accomplish. Now, of course, this doesn't mean that capitalism in some broader sense was abolished in 1924, but this is an enormous regulation that has turned our economy into something radically different from what it would otherwise be. One, I think that's a very, that's a provocative stance to say that capitalism, in your opinion, capitalism in a sense ended in 1924, but it also brings us into the 20th century. And I think there's a lot of forces becoming intertwined in the first half of the 20th century. And I think most prominently for this story of capitalism

is the rising socialism, global socialism, right? And so I want to get your takes on whether you think that capitalism as we know it today wouldn't exist without socialism as a counterforce, particularly as they're kind of each being developed in that early to mid 20th century period. Yeah, absolutely. There's no question. Capitalism as we know it today would look dramatically different were it not for the presence of its socialist other throughout the 20th century. There's no doubt about that. I guess it's obvious if you know enough history. So, I mean, the first thing is without socialism,

there's no World War II. Without revolution in the Soviet Union, the Nazis very likely did not get to power in Germany because a large part of their pitch is we're going to go and save you from Bolshevism, right? So without the rise of either the communists or the Nazis, then you probably have a peaceful transition. In terms of like how much the welfare state in the West has been shaped by the rise of socialism, I know there's a very popular idea that the only reason why or the main reason why capitalist countries adopted the welfare state was they were worried that people, that you basically needed to go and dissuade people from pushing to full socialism by saying, we'll go and do some moderate steps so that you don't

want to go full Soviet. I would just say that most people in America had no idea what was going on in the Soviet Union, good, bad or otherwise. So I don't see how that could have made much difference in terms of U.S. politics. Well, can I just say one thing? I think you're absolutely right. This idea that welfare state comes around as a kind of palliative to avoid a kind of Soviet-style transition here, I think that's absolutely right. In my view, had there never been a Soviet Union, you would have still had the welfare state in the West because of the domestic sources of pressure that led to it. There are two fundamental sources that shaped the 20th century. One is the rise of the labor movement, which was an artifact of the growth of socialism

as a political force and an ideology. And the second was decolonization. This was the other event that fundamentally shaped the 20th century. And Soviets are just part of that story. They're not a main driver of that story. I would say that, and of course, this is just my own kind of professional bias here. I actually think that the Eastern Bloc, not just the Soviet Union, but the wider kind of Eastern Bloc and socialist world, if we can include places like China and Cuba, they did actually play a really important role in many ways because they were a foil for the United States. And when we look at things like the civil rights movement or the women's movement, there has been really good scholarship that shows that Soviet criticism, for instance, of the

United States on the international stage of the United Nations actually did end up shaping some domestic policies to make American leaders, particularly white American leaders, much more amenable to the kinds of civil rights and women's rights and other sorts of rights that become much more prevalent in the later half of the 20th century. I also think when you think about decolonization, yes, decolonization probably would have happened irrespective of the existence of the Eastern Bloc. But the Eastern Bloc, first of all, provided a lot of weapons and a lot of the means, right, that allowed many of these countries to actually break free from their former colonial masters. So I think if I started this interview as a socialist, you two have just taught me out of it.

So we could have had a 20th century without World War II and where decolonization happened much more peacefully. Those sound like enormous gains. I didn't say I didn't know World War II. Yeah. That was, that's you. I don't know. So World War II would have happened anyway without socialism? How would that have happened? That's a historical counterfactual that you're just sort of saying. Look, I think here's what, here, if you want to take a kind of a long sweep of what's going on, what we call neoliberalism, why is it called neoliberalism?

It's because it's a new version of something that existed before. And Karl Rove said it best. Brian is entirely right. Around 1920, he said, that's when things went to shit. That's because socialists came around and we, America, you want to want to know when America stopped being great?

It's around 1924 or so. I mean, why don't you agree with that, Vivek? What's that? So why don't you agree with that? So if you think we should let in a lot more low-skilled immigrants, then 1924 should be a bad year in your book too. Well, because I'm not monomaniacal about immigration. There are other things that came with it. I mean, how many people do you think would have come here over the last century if it was era. What era was that? It was the era

before trade unions, before the labor movement came in and imposed these regulations, all the social insurance, the welfare state, and all the high taxation, income taxes, progressive taxation, all that business. It was always about the political power. I think a lot of people, they hear the word neoliberalism, and they some of these like words that are sort of, they circulate a lot in our economic universe. an ideology and policy model that favors free market competition, deregulation, and reduction in government spending. Does that sound right? And how would you say that that approach has shaped our world and our system? I come to this question as somebody who has spent the last 25 years doing research in and on Eastern Europe, right, which were state socialist economies that were then sort of neoliberalized in the 90s. So neoliberalism really gets its start in Latin America, but it is sort of wholesale applied to Eastern Europe after the collapse of communism in 89 and in the Soviet Union in 91. What that meant is a massive and radical dismantling of social safety nets. It meant

pulling all state ownership out of enterprises, even if those enterprises were profitable. And it also meant just a sort of drastic reduction in regulation, which in theory in all of these countries should have through this kind of shock therapy, jumpstarted capitalism, increased prosperity, increased freedom. I mean, again, I think it's important to think about freedom and freedom of choices here for people in their ordinary lives. Well, what did we get in most East European countries? Russia, probably the most paradigmatic example here. We didn't get freedom. We got oligarchy and the mafia, right? We got violence. We got like a massive transitional recession in many East European countries that was deeper and longer than the Great Depression in the United States. So there's the theory and the practice. Neoliberalism is an ideology, a kind of like radical faith in the ability of markets to solve all problems. But I think that

there's a real way in which market solutions can't deal precisely with things like inequality, with things like climate change, with things like automation. And so there has to be some level of government regulation. Even people like Milton Friedman, you know, suggested that there should be a floor under which people should not be able to fall. Hayek in The Road to Serfdom says a similar thing, that wealthy economies have a responsibility to maintain some basic standard of living, at least so that you can maintain health and the capacity to work of your labor force. Our version of neoliberalism is a very recent vintage. I mean, I would say neoliberalism is one of the strangest conspiracy theories that has been developed in the last century. There are almost no human beings who say, I am a neoliberal.

They barely exist. Now, when you go and give that list of free markets, deregulation, austerity, those are all things I and a few other free market economists think are good. It's very hard to find actual politicians who genuinely are gung-ho about this. Instead, I would say that these policy changes that get called neoliberalism, they're just some very basic pragmatism and common sense of saying, look, if we got a socialist economy, we got to move in the direction of free markets. Where else were we going to go? If we have an economy like India strangled in regulation,

we got to deregulate a bit. If we are drowning in government debt and we got low taxes, nice spending, we got to cut back on spending a bit, right? So in a way, it's a compliment to go and say that anything that is basic, pragmatic, common sense is neoliberalism and me and my buddies get credit for it, but that's not the right story. The main thing to understand about Eastern Europe is the countries that reform the most did the best. That's just not true. I say it's absolutely true. That's not true. I mean, and I can point you to the data. There is a book coming out in less than 30 days that will show you very clearly that the speed of reform and the depth of reform had absolutely very little to do with the ultimate economic success of these societies. And more importantly, it depends on how you measure success. If you're only looking at GDP

per capita and you're not looking at inequality and you're not looking at other kinds of measures, you have a very, very different perception of what was going on. And I think that the issue that you're naming is that no politician would call themselves a neoliberal. Actually, that's not true in Eastern Europe. So where does the neoliberal party exist? Where is a party called the neoliberal party running the government? Where is it ever running the government? You don't have to call it the neoliberal party, right? It's the Tories. It's the Republicans. It's any sort of party. It's a bunch of people who don't even accept the name that you're trying to push on them because they

don't really agree with what you're saying. I agree. I agree with neoliberal policies in terms of any of these other people. It's not clear that they do. What I would say is they did realize that there's a point where you're so socialist, so regulated, government's so big, you've got to move in the other direction. And that's what most of the people in these countries did. Vivek, I want to give you a chance to chime in here. Do you have thoughts? I think elements of what Brian is saying are true. To my mind, it doesn't make sense to think of neoliberalism as an ideology promoting markets. So Brian is saying that it's pragmatic and it's commonsensical because economies were so over-regulated and deficits had got to the point where you had to cut back. Well, yeah. Bill Clinton is the one who balanced the budget. And then if you look at the

American deficits under the Republicans, under the people who espouse free market principles, they explode. What does that tell you? What's going on? They don't care about deficits. They never have. It was never an ideology. It was never a faith in markets. What it was, it was a political project, which carried an ideology because it couldn't just say, hey, look, we want to take away all the social supports from the poor and give the money to the rich. You can't actually say that in a democracy. So they say, look, we're trying to cut back on graft, on bloated budgets. We're trying to bring in markets. But here's what happens in any capitalist economy. When you have an economic crisis, when there's a financial crisis, a genuinely died in the world free market here. And Brian would,

I think, be consistent here. Brian would say, let the firms fail. Let the managers lose their income. Let the people who made the investments, the stupid investments in all this bogus housing stock in 2004, 2005, let them take a haircut. What actually happened in the United States? All the costs were borne by working people. How many CEOs at the top actually lost all their stuff, all their investments? None. They were given golden parachutes. Why? Because they don't believe in the ideology.

They don't believe in it. And the government's pushing in it, don't believe in it. Now, they might as individuals believe in it, but they can't practice it. Why? Because the way politics works in capitalism is he who has the power calls the shots. And if the wealthy have power, when they make bad decisions, they don't pay for it because the government subsidizes them. What's happened in neoliberalism is not a consistent pursuit of free markets. What's happened is an imposition of market forces on the poor and a continuing subsidization of the wealthy. That is not a consistent ideology. That is simply not.

And the Cato Institute has been among the people actually criticizing this correctly, I think. But their problem is they think this is an aberration. Yeah. I mean, I wish you were right, Vivek. So free markets for the poor, that would mean that there would be free immigration for people from other countries. We don't have that. Free markets for the poor would mean— No, but you do have no health care. You do have no social insurance.

You do have no trade unions. You do have no subsidized housing. Which other, what you call socialistic countries have? Those are all hyperbole. Medicaid exists. Welfare exists. Unemployment exists. Brian, come on. Either you're being disingenuous or Medicaid doesn't even cover the basics in most states. Food stamps aren't even covered. Well, if you define the basics very high, then it doesn't cover the basics. Yes, high enough for people to have a standard of living, Brian. But again, so if you raise your standards to a very high, then you can always say that whatever government's doing is inadequate. Is that what you think is going? Wait, you think,

hang on, I want to be absolutely clear. You think the criticism that has been leveled at American social networks, at social insurance, is that it doesn't make people wealthy? It's that, yeah. So wealthy in absolute terms, yes. So, you know, of course, compared to the standards that we have today, you can say it's not adequate. Compared to the standards of 50 years ago, it would have been fantastic. Compared to the standards of 100 years ago, it would be tremendous. Absolutely not. Compared to the standards of 50 years ago, it's completely anemic. Yeah. 50 years ago, there was actually some possibility of having some support from social welfare in between jobs. The whole thing has been refashioned to push people back out onto the labor market today. There's no way you can survive more than a couple

of weeks on the actual food stamps and the actual AFDC and the Medicaid that people are given. This is, you shouldn't, I mean, sure you know. So again, I would say that's just your, I would, I got to say that's your paranoia talking. The number of people that- Brian, I hear you're just not aware of the historical scholarship. I'm sorry. Look, here's the thing. If you love motherhood

and someone says one bad word about mothers, you say you hate mothers. And if you love the welfare state and someone says that we need to moderately tone down the welfare state, you say you want to destroy the welfare state. That's what's going on here. No, when you say it's a condition,

it's a condition of getting the kind of economic need that is necessary to preserve human life, that you privatize, that you cut social safety nets, that you cut pensions, that you cut hospital beds, that you cut civil servants who are serving as nurses and teachers, that is not a mild common sense adjustment. That is saying that the fundamental economic viability of the system is more important than human life. And that is the kind of policy that was implemented around the world because of neoliberal policies. Now, you're absolutely right. Nobody is going to say, I'm a neoliberal the same way people don't say I'm a racist. Are you suggesting that because people don't call themselves racist, that racism doesn't exist?

I would say that actual racists do call themselves racist generally. But yes, again, it depends upon where you want to draw the line. If you're going to say that anyone who wants to cut one percent of hospital beds wants to kill people and therefore they're evil, then... But we're not talking about 1%. Well, is it okay if we cut 1% to get the budget under control? Is it okay to cut 20%? Maybe. Yeah, maybe. Like I said, it depends.

And you've got to actually look at what the effectiveness is and so on. Dismantle means bring to zero. So the idea that like the typical Republican politician wants to dismantle the welfare state is crazy. It's just putting your worst nightmares onto someone that you don't really listen to. What's next for American capitalism? Our panelists give us their takes when we come back. Hi, this is Carl from Silver Spring. You're listening to ThruLine from NPR. Think about somebody right now who's maybe staring at a huge medical bill

or, you know, facing eviction, wondering how they're going to make rent due next week. This isn't just hypothetical. You know, millions of people are facing this. Hundreds of thousands at the very least are facing this problem right now in the United States. Given the discussion we had and the historical trends we've discussed, what's the future look like for that person, you know, from where you're sitting? Kristen, let's start with you. I mean, in the United States right now, I think it's pretty bleak, right? We don't have the sort of basic fundamental floor that's necessary to maintain even the

minimum level of human flourishing, right? If you get sick, if you can't make rent, if you can't buy groceries, right? I mean, we hear these statistics that so many Americans don't have $400 to deal with any kind of emergency, right? I mean, the system is stacked against ordinary Americans. The hardworking Americans who sell our groceries, who are the nurses who attend our elderly relatives, the people in the pharmacies, we call them frontline workers, right, during the pandemic. If you're staring down a medical bill or you're about to get evicted where can you turn to for help well it turns out that it's going to be the family and particularly women in the family who are primarily responsible for care work so if you're about to get evicted you're probably going to go home and live with your parents or a brother or a sister, or if you're elderly, you might move in with a child,

which means, not surprisingly, that young people today are less and less likely to want to have children, right? We're seeing this across the developed world where fertility rates are declining because young people understand that the family is being freighted with all of the work that capitalism needs in order to function, but is unwilling to support it in any kind of social way. And so, yeah, my heart goes out to that person. And I don't think the answer is more capitalism. I don't think the answer is pulling yourself up by your bootstraps because those boots are threadbare. And just to add,

I don't think I'm being hysterical by saying that. I think I said paranoid, but excuse me, accusing Vivek. Paranoid, yeah. So first of all, let me say, it really doesn't make a lot of sense that lack of social support is causing low fertility when it is the richest people in the US who have the lowest fertility and the poorest who have the highest fertility, which is true in almost every country. But in any case, so in terms of practical advice, someone is suffering.

This is where even if I thought that I had the perfect political solution for them, I would say, look, that may be true, but your ability to affect political change is near zero. So we've got to focus on the task at hand, which is what true, but your ability to affect political change is near zero. So we got to focus on the task at hand, which is what to do about your problem. If you had a teenage kid who lost their job and they said, I'm going to try to run for the office to go and solve my problem, I would tell my teenage kid, that's a terrible idea that almost certainly won't work. What I want you to do is sit with me while we go through a list of possible jobs that are realistic for you to do. Of course, on the other hand, if I had a person who seemed like they were doing pretty well but was miserable anyway, that's where I would say, well, you have to realize that in life there's all kinds of problems and nobody's life is perfect. Let's

think about someone that you think has a great life and let's go and read their biography and find out all the suffering they had. But yeah, if there's someone who was evicted or lost their job, I would say, let's go and focus on you because that's what we need to do in order to get you on your feet. And then once things are going well, we could have lunch and chit chat about a better society, but I'm not going to go and torment you by telling you to go and start reading my favorite books now when you've got a pressing personal issue. To answer your question, I think Kristen's right. In the short run, things are looking bleak because the millions upon millions upon millions of Americans who can't pay their bills, whether their medical bills or their rent or anything like that, they don't have a lot of options. And the other reason it's bleak is that they are very angry and they're looking for somebody to blame and somebody to take responsibility.

And there are plenty of opportunistic and demagogic political figures who are willing to take advantage of this. All over Europe, it's led to the rise of the far right. And in the United States, that's happening as well. It's just called something like Trumpism or MAGA or something like that. And unless some solution, collective solution is found to address people's grievances, because they're not individual grievances, they're not in their mind, these are real. And unless some way is found to address them, they are going to figure out a way of finding a scapegoat and reaching for some political solution. And it won't be a pretty one. The only solution we have, the only way we can guess what's to be done is by looking

to the past. And this is not the first time in the market economy that people have been this angry, this pissed off. And in the past, what they managed to do was not, as Brian is saying, sit around and think about how to make a better society. The only people who engage in politics to better society are intellectuals. What they did was to act for their own material benefit and their own material conditions. They did that through organizations that generated collective action. So that was through things like trade unions, through things like poor people's organizations, movements of the unemployed, things like that.

Because individually, you have no power in a market economy. If you're poor, you only have power through an organization. Individually, only the wealthy have power. So while in the short run, things are bleak, I'm not as pessimistic right now as I was six or eight years ago. I think the Sanders phenomenon has made a huge difference. Overnight, the political culture of this country changed. Will it continue to build? We'll see. I think the Biden administration has been better than I expected. It could go back to a more, what Brian would object to, neoliberal path, although I don't

think that's possible. I think the era, as I said earlier, unchallenged market fundamentalism is over. While the unchallenged market fundamentalism is over, a non-market fundamentalist path has not yet been laid out. All we're seeing now is a churning, a political churning looking for an alternative. Right. I think one of the other things about the quote unquote neoliberal ideology, we can argue about that word, you know, until the cows come home, I think here is that it makes people feel very lonely and isolated and disempowered. You have no power in the system. But ultimately, we live in a democracy and we spent the better part of the 20th century upholding the principles of democracy on the global stage. And so if we live in a democracy and we're actually trying to increase people's

personal freedom and people's choices in life, then we have to create the kind of infrastructure that allows for people to work together collectively, to better themselves collectively. One thing that I don't think that I've seen from either Kristen or Vivek is any sense of, gee, things might go wrong again, like they went wrong a bunch of other times. Instead, there's a lot of hope that things will work out. And we know from previous socialist regime changes and radical policy changes, they haven't worked out very well. You may say, look, we're only talking social democracy and we just say socialism to get people excited. But I think a lot of what's going on is

there's a willful equivocation so that people who don't even know the Soviet Union ever existed can say, I'm a socialist, and what does that mean? Well, we'll find out when we get there. And that is just the kind of thing that should really fill you with terror. Individual solutions are not going to work in a society that is sort of stacked against the individual. Coming together and challenging and changing that system historically has worked in the past, and I believe it will

work again in the future. We're at time. This has been such an amazing conversation. Thank you all for playing ball with us, like our first roundtable ever. It was great. Oh yeah, sure, sure. Thank you so much Vivek Chhibber. Thank you. Kristen Godsey. Thank you. And Brian Kaplan. Thank you, everyone. Next week, in part two of our capitalism series, we're going to dig deeper into that word Vivek, Kristen, and Brian just couldn't seem to agree on. Neoliberalism.

Which hinges on one simple idea. The market could solve problems that the government couldn't. The more successful the capitalist society is, the better. There has never in history been a more effective machine for eliminating poverty

than the free enterprise system and the free market. Government is not the solution to our problem. Government is the problem. What happened when we embraced the ideology that the market is above all? Next week in our Capitalism series. That's it for this week's show. I'm Randa Bifete. I'm Ramteen Adablui. And you've been listening to ThruLine from NPR. This episode was produced by me.

And me and... Jamie York. Lawrence Wu. Blaine Kaplan-Levinson. Julie Kane. Victor Ibeyes. Darius Rafion. Yolanda Sanguini.

Fact-checking for this episode was done by Kevin Vocal. Thanks also to Anya Grunman, Tamar Charney, and Julia Carney. Our music was composed by Ramtin and his band, Drop Electric, which includes... Naveed Marvi. Cho Fujiwara. Anya Mizani. If you have an idea or like something you heard on the show, please write us at ThruLine at NPR.org or hit us up on Twitter at ThruLine NPR.

Thanks for listening. And a special thanks to our funder, the John D. and Catherine T. MacArthur Foundation, for helping to support this podcast. Ramtin, why do you sound so tired today? I was staying up late last night writing music for our episode. Oh, you know what would help? It's Brewline. I know. They get it. We've been here before. I was going to say a good night's sleep. Oh, my bad. I thought you were just going to start going on about Brewline.

Brewline coffee. So good, Ramtin can't stop talking about it. Grab a bag at nprcoffeeclub.org so I don't have to go through this anymore. This message comes from Grammarly. Back and forth communication at work is costly. That's why over 70,000 teams and 30 million people use Grammarly's AI to make their points clear the first time. Better writing, better results. Learn more at grammarly.com slash enterprise.