Throughline - Capitalism: What Makes Us Free?

Episode Date: July 1, 2021

What's the role of government in society? What do we mean when we talk about individual responsibility? What makes us free? 'Neoliberalism' might feel like a squishy term that's hard to define and understand. But this ideology, founded by a group of men in the Swiss Alps, is a political project that has dominated our economic system for decades. In the name of free market fundamentals, the forces behind neoliberalism act like an invisible hand, shaping almost every aspect of our lives.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. Hey, it's Rand. And Ramteen. So, how much are you learning about capitalism so far in this series? How much are you questioning it?

Well, come question it with us next Thursday, July 8th at 8 p.m. Eastern for a special capitalism edition of Throughline Trivia. Yep, that's right. We are back with three rounds of trivia that you can play by yourself or with a team of up to five people. The winning team will take home a three-month subscription to the NPR Coffee Club. And let me tell you, that's some really good coffee. Listen closely to this episode to help your chance of winning trivia on July 8th

and go RSVP at nprpresents.org. Okay, on with the show. Look at this lead pencil. Literally thousands of people cooperated to make this pencil these people have cooperated with one another don't speak the same language they're people of all different religions they may hate one another when you go down the store and buy this pencil you are in effect trading a few minutes of your time for a few seconds of the time of all those thousands of people. That's the miracle of the price system. Everybody is benefiting. There's been no central direction. It was a magic of the price system that brought them together and got them to cooperate

to make this pencil so that you could have it for a trifling sum. It worked so well that ordinarily we're not aware of it. That is why the operation of the free market is so essential. But even more, to foster harmony and peace among the peoples of the world On April 10, 1947, a group of 39 economists, historians, and sociologists gathered in a conference room at a posh ski resort at Mont Pelerin, Switzerland. Glasses clinked, cigars burned, a mission statement was written. Over large stretches of the Earth's surface, essential conditions of human dignity and freedom have already disappeared. In others, they are under constant menace from the development of current tendencies of policy.

What happened in that smoke-filled room over the course of a few days probably didn't feel all that consequential at the time. It probably just felt like any old conference. But this small gathering was a group of thinkers with really fringe ideas, so much so that they tucked away in the Swiss Alps to be able to freely talk about them. The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power. And from that meeting, they would start an organization called the Mont Pelerin Society, MPS. And the ideas discussed in that room more than 70 years ago would evolve and warp, and this is no exaggeration, come to shape the world we live in. Even that most precious possession of Western man, freedom of thought and expression, is threatened by the spread of creeds. This is Friedrich Hayek.

Which seek only to establish a position of power in which they can suppress and obliterate all views but their own. Hayek was the man who invited everyone to that first meeting at Mont Pelerin, which launched the Mont Pelerin Society, a society that would produce Pulitzer and Nobel Prize winners and members that would become political leaders and top advisors. They believed that liberty, freedom, was the most important thing, and that market capitalism had to be protected because free markets meant free people. These shared principles became a decades-long political project that influenced a long list of U.S. politicians and presidents from both parties. But it didn't stop with politics.

It's become an ideology that's reshaped our relationships to our government, each other, and our own selves. An ideology some people call neoliberalism. I'm Lane Catherine Levinson, and today on ThruLine, a story about how a small group of determined people can change everything, and how the ideas thrown around in that Swiss hotel room came to dominate our way of life. This is Eric from Castleberry, Florida, and you're listening to ThruLine from NPR. This message comes from WISE, the app for doing things in other currencies. Send, spend, or receive money internationally, and always get the real-time mid-market exchange rate with no hidden fees.

Download the WISE app today, or visit WISE.com. T's and C's apply. Part 1. Go tell It on the Mountain. Radicals and reactionaries gained power as people searched for leadership and answers. In the late 1920s, the economy of the United States collapsed. Nearly 9,000 banks failed. People lost everything. As frustration turned to fear and anger, people took to the streets. Communists led hunger marches in many big cities and attracted thousands.

The week before Americans went to the polls in 1932, 20,000 unemployed filled the streets of Chicago. In 1932, three and a half years into the Depression, First of all, let me assert my firm belief. Franklin D. Roosevelt, FDR, became president. That the only thing we have to fear is fear itself. And having nowhere to live and nothing to feed your kids, FDR knew the country was in fear, was in crisis, and he needed to act quick. To do so, he created the famous alphabetical agencies of the New Deal. Their purpose? To fight the Depression, to provide work and security. His government went hard, spending money and creating programs we still have today, like Social Security, unemployment insurance, welfare, and food stamps. They also

passed the National Industrial Recovery Act, which allowed the government to regulate industry and business. All of this was a huge change. The government was suddenly involved in the economy in a way it had never been before. And from Roosevelt's desk, throwed a huge program of public works. Pressing a button, he put into operation a great new system of dams, flood control, and electricity for the people. And that strategy pretty much worked. The U.S. made it through the Great Depression. And after the start of World War II, the economy was more robust than ever. And that strategy pretty much worked. The U.S. made it through the Great Depression. And after the start of World War II, the economy was more robust than ever. One of the things that the New Deal did was to really change the relationship of the ordinary Americans to the federal government.

This is Lily Geismar. I'm a professor of history at Claremont McKenna College. She's also currently writing a book called... Left Behind, How the Democrats Failed to Solve Inequality. Lilly says the success of FDR's policies sent a signal to the people that said, hey, the government's here for you. Engendered a tremendous faith in government. And I think that this was sort of seen as kind of the right approach by a large number of Americans. For many people, that's the idea that you'd go into their houses and they'd have pictures of FDR up on their walls.

I mean, that he played this kind of really powerful role. But here's the thing. The history of the New Deal that most of us get today is pretty flat. The reality is not everybody enjoyed the benefits of these programs, especially Black Americans. But what it also did was piss a lot of people off. People who fundamentally disagreed with the government intervening in the economy. Even people across the world, like our guy Friedrich Hayek, was tearing his hair out.

Hayek was arguably the most prominent and influential advocates for free markets in the North Atlantic world from the 1930s to the 1950s. This is Angus Bergen. I'm a historian at Johns Hopkins University. And an expert in all things Friedrich Hayek. He became the person who kind of symbolized a reaction to the Great Depression that said, no, we shouldn't engage in dramatic fiscal stimulus, certainly not in dramatic monetary stimulus

to try to pull ourselves out of this situation. Rather, we should let events take their course. Because if we try to do anything dramatic, we're only going to end up, as he saw it, exacerbating a boom and bust cycle that would carry on in perpetuity. The basic conviction which has guided me in my efforts is that if the ideals in which I believe unite us, and for which in spite of abuse of the word there is still no better name than liberal,

are to have any chance of revival, a great intellectual task is in the first instance required before we can successfully meet the errors which govern the world today. Hayek was born in Austria in 1899 and would eventually live in London and later the U.S. to pursue a career in economics. His whole life he spoke with a pretty thick accent. He had kind of an aristocratic bearing. Hayek considered himself a liberal. Not a liberal in the sense we think of it today, but what many call classically liberal. Someone who believed in individual freedom, liberty, and free thought. So to him, FDR's policies had gone way too far.

He and a lot of his colleagues hated things like the NRA. The National Recovery Administration, that NRA. And efforts by the government to proclaim what business should be doing, therefore interfering with what he saw as the inherent wisdom of individuals and business owners. Hayek was arguing in the very early 1930s that the appropriate response, in his words, to the Great Depression was to leave it to time

to effect a permanent cure. That's a very bold statement because you're imagining people have no money. They're waiting on lines to get food. There's no jobs. There's no end in sight. And someone saying, you know what the government should do to solve this?

Nothing. Yeah. What must have made Hayek's take sound even more out there was that by the 1940s, FDR's policies, combined with massive wartime production, had actually lifted people out of poverty and cemented the U.S. as an economic powerhouse. Of course people in situations of deep distress

are going to be looking for solutions. And if you don't provide them with solutions, they're going to turn to somebody who does. And hence, Hayek was increasingly marginalized from his colleagues, and not that many economists shared his views. There is no lack of mentioning in Hayek's letters or his colleagues' letters

just how marginalized they were. And so they are very preoccupied with their own sense of marginalization within their profession and a broader public. Our freedom of choice in a competitive society rests on the fact that if one person refuses to satisfy our wishes, we can turn to another. Hayek didn't quit. In 1944, he released a book, or maybe you could call it a manifesto, or Bible. But if we face a monopolist, we are at his absolute mercy. It was called the Road to Serfdom. And an authority directing the whole economic system of the country

would be the most powerful monopolist conceivable. That title meant to hit a nerve. Serfdom meant economic servitude. Very not free. The message that a lot of people took from it is that, you know, one, two, three steps towards government intervention in response to a crisis or in other kinds of circumstances that are seen as reasonable solutions to problems that people were facing at that time

would eventually lead us down a pathway to socialism. It would have complete power to decide what we are to be given and on what terms. It would not only decide what commodities and services were to be available and in what quantities, it would be able to direct their distributions between districts and groups and could, if it wished, discriminate between persons to any degree it liked. And the key moment in that, in Hayek becoming a public figure in the United States, was the condensation of that book by Reader's Digest. And Reader's Digest might seem kind of irrelevant to us today, but it was the largest circulation magazine in the United States at the time,

had over 8 million subscribers. Lots of people were reading it, and it was presented as the lead article, this condensation of the book. And many, many people encountered Hayek's ideas. Almost overnight, Hayek went from an obscure, aristocratic Austrian economist to a public symbol in the U.S. who represented a type of New Deal resistance, which you'd think would make him thrilled. But Hayek was actually kind of frustrated. He felt like most people didn't really understand what he was trying to say. Reader's Digest stripped away a lot of the nuance,

and he expressed himself a frustration that he thought many readers took it the wrong way, right? He thought many readers were saying that Hayek thinks that the market is always right, and we shouldn't have any form of government intervention in the economy. And if you closely read the actual book, The Road to Serfdom, not this condensed version, right, you find all kinds of caveats, right? He's willing to acknowledge that the government does have a role in providing food and shelter, certainly regulating businesses for potential environmental damage, pollution, things like that. The government does have a role to an extent, which Hayek felt was a fine line and a dangerous one

because people who got excited about government subsidies could get excited about socialism, his biggest fear. He wanted to persuade these people who might otherwise be pulled in by what struck them as deeply compelling ideas that, no, if we lose this core element of the market mechanism, we're going to lose many things that we hold dear.

Well, in a sense, throw the baby out with the bathwater. Way before he even published The Road to Serfdom, Hayek had been fantasizing about bringing together a big meeting of scholars who agreed with him. In order to exchange ideas with one another and hopefully, as he saw it, plant garner a little bit of funding and maybe to convince colleagues from a range of different national environments to come together and talk about their ideas. He found a place in the Swiss Alps, Mont Pelerin, to host the meeting. And he sent out a bunch of invites.

Slowly, the responses started coming in. Dozens of people were on board, some making plans to cross the Atlantic Ocean for the first time since the end of the war. This was a big deal, and it was all lining up. And finally, this group of people from all over the world, almost all men, found themselves in a room being greeted by Hayek.

I must confess that now, when the moment has arrived to which I have so long looked forward, the feeling of intense gratitude to all of you is strongly mixed by an acute sense of astonishment at my own presumption

and audacity in setting all this in motion. I have taken on me in asking you to give up too much of your time and energy for what you might well reward as a wild experiment. The wild experiment had begun. Hayek was living his dream, except... The meeting itself actually wasn't that great.

I mean, it was a conference, so, you know, it kind of sucked. The reality is that sessions are boring. Conversations about ideas very often don't really go very far. They end up being a little more superficial than the people who planned the meeting hoped that they would be. Why, then, is it important? Why do we talk a lot about this 1947 meeting despite that? And I think even if conferences are sometimes disappointing

in their actual ideas that are discussed, they're very important for networking and for creating a sense of solidarity, a sense of community, established lines of communication. So it's less actually the conversations themselves in the rooms in this hotel overlooking a lake and Alps in Mont Pelerin that we should see as transformative, so much as the connections that people made while they were there. And that's exactly what happened.

The meeting launched the Mont Pelerin Society, which kept all these scholars connected as they went on in their careers. It was a way for these fringe ideas to keep cooking on a low burner, a slow boil. Those few of us who believed in freedom and free markets and minimum government were regarded as nuts over on an extreme fringe. Remember that guy talking about a pencil at the top of the episode? That's this guy, Milton Friedman, one of the people at that first Mont Pelerin Society meeting. Add to that that this was my first trip overseas, my first trip out of the United States, so that it was a very memorable meeting indeed. It was a remarkable collection. You have to give Friedrich Hayek full credit for having the

idea of organizing society and for being able to make the physical arrangement to do so. When we come back, Milton Friedman takes Hayek's ideas to the people, and the people start to listen. This is David Owens from Danville, Alabama. You're listening to including wines inspired by popular NPR shows, like Weekend Edition Cabernet. Whether buying a few bottles or joining the club, all purchases help support NPR programming and fund quality reporting developed

to connect people to their communities and the world they live in. More at nprwineclub.org slash podcast. Must be 21 or older to purchase. Part two, the eclipse. Part 2. The Eclipse. Dear Ed. President Dwight Eisenhower, in a letter to his brother, Edgar Eisenhower, November 8th, 1954. Now, it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions.

But to attain any success, it is quite clear that the federal government cannot farm programs, you would not hear of that party again in our political history. There is a splinter group, of course, that believes you can do these things. Among them are an occasional politician or businessman. Their number is negligible, and they are stupid. If there's one word that's often used to sum up the 1950s, it's boom. There's a level of just general prosperity that has never been really seen before. You had a car for the first time. You could take vacation. You could support a family on a single breadwinner salary.

You lived a kind of middle class lifestyle. If you were white, remember, the New Deal was exclusionary and Black people and people in farming and domestic service jobs were explicitly left out of programs that helped you buy homes and get Social Security, things that help people build wealth. At the same time, the 1950s was pretty much when our ideas about what it meant to be middle class in the U.S. came into being. And most people agreed the New Deal policies were responsible for it. Lily Geismar says you couldn't really find a Democrat or Republican

who openly disagreed with that. Amongst the political parties, there was relative consensus that these were the kind of ideas that were sort of broadly governing society. The subject of the talk tonight is the role of government in a free society. And I think in discussing that subject, the first thing you have to do is to emphasize the very different meanings that free has. But, of course, not everyone was on board. Would you please join me in welcoming Dr. Milton Friedman. So when you ask who is Milton Friedman,

despite having much in common with Hayek as far as his ideas are concerned, personally, he was a real contrast. He was not coming from this kind of aristocratic, highly cultured Austrian background that Hayek was coming from. He was coming from a much more marginalized community. Milton Friedman's family didn't have a lot of money. He was raised by working-class Jewish immigrants in New Jersey at a time when most people didn't have a lot of money, since the Depression was in full swing by the time he got his master's in the 1930s. This financial strain inspired Friedman to study economics. After school, he took a job working in

the government, FDR's New Deal government, and eventually got a job at the University of Chicago, where he got connected to Hayek, and started to develop different views from his former government colleagues. And that's what landed him an invitation to that Mont Pelerin meeting in 1947, where finally he was amongst friends. Friedman later described it as a unique environment where you could say things without being worried that somebody was going to stab you in the back. There was a sense that you were surrounded by colleagues who you could trust to some degree. A safe space that emboldened Friedman to go public with his fringe beliefs. In 1951, he published an essay called...

Neoliberalism and its Prospects. It really encapsulates a lot of the ideology of this meeting at Mont Pelerin in 1947. First of all, the government doesn't have any responsibility. People have responsibility. This building doesn't have responsibility. You and I have responsibility. People have responsibility. We have been becoming an over-governed and over-regulated society.

We have been moving down the road that Friedrich Hayek in his great book called the road to serfdom. We do not have to continue down that road. We can be the masters of our own destiny. Friedman was carrying the Mont Pelerin torch and turning Hayek's complex ideas about privatization, deregulation, and individual freedom into bite-sized snacks. And Friedman turned out to be great at that. Taking very complicated ideas and conversations and packaging them to make them sound very simple and compelling in ways that normal people could understand. He understood the rhetorical power of simplicity. And could translate an entire ideology into one simple idea.

The market could solve problems that the government couldn't. And this applied to almost everything. In his utopian world, he was pretty clear there would be no public education. He pushed for school vouchers. Market competition is the surest way to improve the quality and promote innovation in education as in every other field. And something called the negative income tax, an alternative to welfare that simply gave people money through the tax code. With the positive income tax, you're entitled to a certain amount of personal exemptions and deductions, and above that amount you pay tax. But suppose you have no income. Under a negative

income tax, a fraction of your unused exemptions would be paid to you by the government, guaranteeing at least a minimum income. He clearly liked the idea of giving people money so they could meet their basic needs, but health insurance? Not so much. Let's not call it national health insurance. It's not national health insurance. There's nothing national about it. It's for individual people.

There's no health about it because it'll make medical care less good. It'll make the health of the American people worse. So he talked about abolishing things like the FDA, abolishing national parks, abolishing the estate tax, abolishing the charitable tax exemption, and just say we should throw this stuff out. He could say, I could share your desire to, you know, improve the well-being of people who are in bad economic circumstances, but I have this different, more economically efficient way to do so.

And you know what's not economically efficient, said Friedman? The federal government. If you put the government in charge of the Sahara Desert, Friedman said, in five years, there'd be a shortage of sand. The guy knew how to make a point, and he talked to whoever'd listen. And so over time, he went from unknown academic to TV celebrity. He went on talk shows. Here he comes again, Milton Friedman. And boy, does he make an entrance now, because this is a blockbuster book, Free to Choose. A best-selling book led to a 10-part, 10-hour-long PBS special, also called Free to Choose, which had an impact on everyone from Phil Donahue to Arnold Schwarzenegger.

Being free to choose for me means being free to make your own decisions, free to live your own life, wrote a guest essay for the New York Times, and lectured on any podium put in front of him. He was everywhere all the time. If you turned on the TV, there was Friedman. If you walked into a bookstore, there was Friedman. If you opened the paper, there was Friedman. If you walked into a bookstore, there was Friedman. If you opened the paper, there was Friedman. The guy was just always there. The more successful a 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. And always on brand. The armies of bureaucrats administering our lives, making our decisions, spending our money, all supposedly for our good. The people who get on welfare lose their human independence and feeling of dignity. A society that aims for equality before liberty will end up with neither equality nor liberty. I'm a believer in freedom.

It was a rallying cry, and a daring one, because it was a direct attack against a system that Americans were told worked. So why listen? Well, you wouldn't, unless all of a sudden you felt like things weren't working so well anymore. It sort of hit at this particular moment. The 70s. The Vietnam War was winding down, the high of the post-war boom was wearing off, and the economy was starting to tank. But the kind of straw that really hits in 1973 to cause a recession is the oil crisis.

Good evening. The Middle East War produced developments all over the world today. The oil producing countries of the Arab world decided to use their oil as a political weapon. How much have you got left in there? None. It's empty. There is no oil. There's none to get and it can't deliver any. You what? Your damn rights. And when you've got babies, you're going to have to worry. I just couldn't imagine something like this would happen in America. When there's this lack of oil, it also sort of just creates sort of economic havoc and leads to rising inflation and rising unemployment. And so this is what we call,

what's known by the great phrase of stagflation. I'm a waitress. How long have I been out of work? Since June the 20th of 73. This really affected everyday life. The cost of things just went up multiple. So all of these things, they're really feeling it. You say you're a furniture manufacturer. For how long? About 24 years. Have you ever seen it this bad? Yes, during the Depression. That really creates economic hardship, but I think creates a sort of psychological and intellectual

just sort of free fall. I mean, the combination of the recession coupled with all of those events opens up kind of a new landscape and brings in kind of a search for new types of approaches. And people look to the sort of market-oriented ideas of people like Hayek and then also Milton Friedman, and they gain new attention. Friedman was very explicit about the importance of crisis to people's mentality, people's willingness to test out new ideas. He would say explicitly that some of my ideas seem extreme and nobody's going to implement them right away, but the next time that a crisis hits, they'll be ready to hand

and people are looking around for a solution and they'll say what we've been doing in the past hasn't worked, so let's try out something different. You put out ideas with kind of a long-term vision for political change. They marinate and then something will happen that will make a marginal idea seem newly possible. Over the course of the 1970s, there's a shift away from government, a government that was looking less and less reliable, and towards markets as the solution to the country's problems. And suddenly, those fringe ideas and thinkers that came together at Mont Pelerin weren't looking so fringe anymore. I don't think it's an exaggeration to call Milton Friedman's Free to Choose a survival kit for you, for our nation, and for freedom. And there's a president who's probably most well known for selling that

message to the American people, a president who became a Milton Friedman fanboy. Government is not the solution to our problem. Government is the problem. Ronald Reagan is basically Friedman in presidential form, and his supply-side trickle-down economics, or Reaganomics, was inspired and literally advised by Friedman. So it makes sense that he's often credited as the guy who took a sledgehammer to taxes, regulation, and welfare, the pillars of the New Deal. But he wasn't the first. I know that the American people are still sick and tired of federal paperwork and red tape.

Before Reagan, there was a soft-spoken peanut farmer from Georgia named Jimmy Carter. Bit by bit, we're chopping down the thicket of unnecessary federal regulations by which government too often interferes in our personal lives and our personal business. He implements a lot of the things that are sort of associated with Reagan. Today, Carter's kind of remembered as a progressive. I mean, he put solar panels on the White House roof in 1980, but he also deregulated the trucking industry, the airline industry, he slashed taxes, particularly capital gains taxes,

which helped investors over everyone else, and all with the full support of his fellow Democrats. One of their major slogans was that the solutions of the 30s can't solve the problems of the 70s. And then they changed that to the solutions of the 30s can't solve the problems of the 80s. And it was the solution of the 30s can't solve the problems of the 90s. Now the evening is young. And we don't know yet what the final tally will be, I think we know enough to say with some certainty that New Hampshire tonight has made Bill Clinton the comeback kid. Coming up, the left takes a sharp ThruLine from NPR.

Part three, the air we breathe, the water we drink. Okay, forget the fun and games. It's time to get serious. And for dads to be truly inspired, they need to be truly wired. This is from a 1994 TV segment about the hottest new gift idea for Father's Day. It's called the Internet. You can send and receive mail to and from people all over the world. Dad can log on 24 hours a day and find out what the email mailman has dropped off. Just reading my email. And now that I think about it, a bunch of dorky dads excited about reading their email from home

is the perfect way to picture the 90s tech boom. Boom, boom, bingo. I'm making money. With this finger, John. The World Wide Web. Powered by entrepreneurs. Powered by you. Entrepreneurialism and the tech industry,

that's the kind of way to bring about economic growth. And the Democrats were fully on board. After years of Reagan and Bush, the party was looking inward, wondering why they just kept losing. They decided that some of their core values—welfare, labor unions, oversight—were bringing them down. And they wanted to win. There's this idea of this kind of political realignment that's going on in the United States towards the Republicans. And Bill Clinton becomes the kind of real centerpiece of that approach. They're a new generation of Democrats, Bill Clinton and Al Gore, and they don't think

the way the old Democratic Party did. They've called for an end to welfare as we know it, so welfare can be a second chance, not a way of life. They've sent a strong signal to criminals by supporting... Okay, so Bill Clinton is part of this orbit of Democrats. He's the governor of Arkansas. He becomes governor quite young, and he's trying to kind of bring in new solutions. Let us all join together in welcoming the next president of the United States of America, Governor Bill Clinton, Hillary Clinton, Joe is Clinton. Wins in 1992, wins back a lot of the kind of white, moderate suburbanites and white, lower middle class and working class voters who've been kind of drifting towards the Republican Party

and comes into office at a moment of kind of the end of the Cold War and a sense that these ideas of kind of liberal democracy and free market capitalism are the best approach. This election is a clarion call for our country to face the challenges of the end of the Cold War and the beginning of the next century. To restore growth to our country and opportunity to our people. To empower our own people so that they can take

more responsibility for their own lives. So many of the bills have the word responsibility in them because of this idea of like people, government will be responsible in some ways, but like it's a reciprocal relationship and people have to be responsible for themselves. So like we'll help you, but only up to a point. Then you're on your own. But you'll be better off because you'll be able to make more money that way than living off a government handout. This thinking basically describes Clinton's signature welfare-to-work reform, which pulled the plug on welfare services after two years. And that is seen symbolically as a sort of change in

the New Deal. It gives us a chance we haven't had before to break the cycle of dependency that has existed for millions and millions of our fellow citizens, exiling them from the world of work that gives structure, meaning, and dignity to most of our lives. Another famous nail in the coffin of New Deal liberalism passed under Clinton is the repeal of the Glass-Steagall Act, which created a separation between commercial and financial banks. The Glass-Steagall Act was a signature law of the New Deal era that was created in direct response to the 1929 stock market crash. The main goal of the act was to not let that ever happen again by severing ties between banking and investing activities. It was so that 9,000 banks never failed again

because that's literally what happened during the Depression. But when key provisions of Glass-Steagall were repealed under Clinton to boost the economy, it felt like a slap in the face for FDR's legacy, making Clinton's message loud and clear. The era of big government is over. And so you have a Democratic president saying that, and that sounds very similar to what Ronald Reagan was saying. Government is not the solution to our problem.

Government is the problem. I say again, the era of big government is over. By the 90s, these two supposedly rival political parties seemed to be moving in lockstep. Carter, Reagan, and Clinton all started to sound kind of the same. Kind of like a bald, five-foot-tall man from New Jersey who never held political office, but had more influence on America's economy than almost anyone else. They sounded like Milton Friedman. And when Friedman died in 2006, top Clinton advisor Larry Summers wrote an op-ed for the New York Times that said it plain and simple.

Any honest Democrat will admit that we are now all Friedmanites. And so you can see right there the kind of admission of the ways in which the common knowledge has shifted. When you had the New Deal order to a neoliberal order, you have people on the left admitting that they are thinking alongside Friedman. I stand before you today to announce my candidacy for president of the United States of America. It's so funny. I think actually, if I remember correctly, weren't there lots of pictures when Obama came in of like him dressed like FDR? And there was this idea that he was going to be this like return.

I think they do the time, they have done that many times where they like have someone dressed as FDR, but they did it around Obama. And there was, I think there was a question, like what would they approach be? And I think in many ways, Obama's policies were a continuation of the kind of Clinton approach. Many of the people who were in the

Clinton White House came back under Obama. And many of the programs the Obama administration adopted were very pro-market and particularly pro-Wall Street. He was all about the marketplace, whether it came to health care, because the Affordable Care Act or Obamacare is a marketplace for health care, or schools, because like Clinton, he was a huge charter school advocate. And like Clinton, Obama was all about the hustle. It means we should support everyone who's willing to work and every risk taker and entrepreneur who aspires to become the next Steve Jobs. Most new jobs are created in startups and small businesses.

So let's pass an agenda that helps them succeed. Both parties agree on these ideas. So put them in a bill and get it on my desk this year. He made regular visits to Silicon Valley and teased Mark Zuckerberg like an old friend. My name is Barack Obama, and I'm the guy who got Mark to wear a jacket and tie. Thank you. I'm very proud of that. Second time.

I know. I will say, and I hate to tell stories on Mark, but the first time we had dinner together. I'm somebody who spends a lot of time on college campuses, and there's all this language about entrepreneurship and being your own person and starting your own business, which many people look to as this kind of celebration of the moment, but that's actually quite neoliberal in its thinking,

that you're in charge of yourself and that you're your own actor and that there's not the kind of, not the sort of safety net looking out for you, and that you're somehow empowered by that experience of setting your own hours. And the other side of that is that you don't have the kind of typical protections in place, that you have no job security, you have no overtime,

you have no health benefits. We're all doing lots of work and the idea that we're like more empowered by it. But like, in fact, it's like it's creating other kinds of precarity and stress. Okay, we've been talking about economic policy for a while now. Longer than I ever thought I'd talk about economic policy, maybe ever. And we've seen how this fringe movement won over both political parties, whether they ever named themselves as neoliberal or not. It made them different versions of the same thing in a lot of ways. But so what? How do these presidents talking about tax cuts and

deregulation and free markets and individual responsibility and entrepreneurship, how does that actually affect our lives? This is what UC Berkeley Poli Sci professor Wendy Brown thinks about constantly. I've written on a lot of different topics, but on neoliberalism, I've written two books. One is called Undoing the Demos, Neoliberalism's Stealth Revolution. And the other is called In the Ruins of Neoliberalism. The Rise of Anti-Democratic Politics in the West. The reality is we live in a country that's fully embraced the idea that the market can solve most of our problems. It's part of our national identity. And Wendy says that's creeped into our own personal identities and gotten inside our own heads.

I take neoliberalism to be a worldview and a set of practices and a way of governing that is much larger than simply free market policies. And if you don't have an understanding of that as what has saturated our society, it becomes the air we breathe, the water we swim in, but we don't know what we're breathing and we don't know what we're swimming in. It is a way of conducting yourself that you imagine to simply be natural, but actually has been very specifically constructed and organized over the past 40 years. of human capital, if you understand yourself in a fully economic way, it means you might approach your dating life or your educational life or your leisure time, not so much as a profit-making undertaking, but still as one to manage in economic terms and think about in economic metrics. So concretely, this means that you might think, well, I could take a vacation, but that would actually depreciate

my chances of being noticed in the following six ways at work or in the dating scene or something like that. And it might depreciate my value in those domains. So this is not the right thing to do. Now what's happened there? What's happened is that you have a human being who is thinking about everything they do in terms of their human capital value being enhanced or depreciated. Should I choose this partner to work with or that one? Should I date this person or that person? Not out of feeling, not out of desire, but out of human capital valuation. And that is a significant transformation of human beings. The point is, ladies and gentlemen, that greed, for lack of a better word, is good. This economization of our decisions and our ways

of life, this is novel. This is what has been brought about by that transformation that neoliberalism has broughtought into economizing everything in the public and social domains. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. I mean this is basic Wall Street, and this is the basic Wall Street that has gone into all of our souls. We for life, for money, for love, knowledge has marked an upward surge of mankind. All of these things are the result of a deregulated economy, which unleashes the capacity to make profit on things that have no oversight and no regulation and pull people in with the promise, you too can be a homeowner. You too can be a middle-class person by getting this education. You too can

be a millionaire. You too can climb your way up to the top, except there is no top. You never get off this wheel. I think that, you know, it's a Hobbesian world in some ways. Hobbes described us as creatures who would only be, as he put it, diffident or untrusting and competitive and anxious and finally murderous if we didn't have something that secured and held us in common. And one could say that what neoliberalism has done is taken away that thing that secures and holds us in common. It doesn't believe society exists, So there's no social body.

So it's just ourselves. So what are we? We're little Hobbesian creatures, diffident, anxious, competitive, and in the end, a little murderous. Next week, in the final episode of our capitalism series. He's like, if you think positively, you're going to get all of these things. Get up every morning, look in the mirror and repeat over and over again. I am going to conquer my profession. So you give money like a seed goes into the ground. It's dormant. Don't ask about it anymore. But then it will pop up and it will come back to you. You will be granted wealth. Ten, a hundred, a thousand fold. God says it, I can have it. I believe it, that settles it.

How religion and capitalism join forces to change the way we think about our work, our society, and ourselves. The Prosperity Gospel. Next week on Do Life from NPR. That's it for this week's show. I'm Rondabdin Fattah.

I'm Ramteen Adablui, and you've been listening to ThruLive, from NPR. This episode was produced by me, and me, and Jamie York, Lawrence Wu,

Lane Kaplan-Levinson, Julie Kane, Victor Ibeez, Darius Rafion, Yolanda Sanguin. Fact-checking for this episode was done by Kevin Vocal, and a special thanks to Pablo Luna and Lorenz Giorgi for their voiceover work. Thanks also to Anya Grunman, Tamar Charney, and Julia Carney. Our music was composed by Ramtin and his band, Drop Electric, which includes... And don't forget to show us what you've learned. Music was composed by Ramtin and his band, Drop Electric, which includes... Naveed Marvi.

Sho Fujiwara. Anya Mizani. And don't forget to show us what you've learned at next week's virtual trivia event. On Thursday, July 8th at 8 p.m. Eastern, we go hard with three rounds of questions all about capitalism. Hosted by Rund and I, along with our trivia third, Terry Simon. It's been a while, and it's going to be great. RSVP and get more info at nprpresents.org. And a special thanks to our funder, the John D. and Catherine T. MacArthur Foundation, for helping to support this podcast. Hey, remember that bananas episode we did?

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