Free Market Failures

[Disir]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

I really don't know enough about what happened in Russia to explain in detail what you are getting wrong, but I do know that the government continued to subsidize under performing factories and that the vouchers issued to allow people to buy stock in the companies were pretty much useless. On top of that, the central bank overreacted to the demand for money and the resulting hyperinflation pretty much wiped out the emerging middle class.

I am sure you think that proves the free market failed, but all I see is a lack of a free market and government interference causing massive problems. If I thought you were a serious person, and not just an idiot, I might take the time to look up resources to educate myself, and you, on why the 1990s market in Russia failed, but I am 100% sure you really don't care.

Then you don't know what you are talking about. Waiting for you to drum up excuses is a waste of my time. If you haven't figured out by your fourth economic class that it is all theory then you are merely a tool. It looks beautiful on paper but there is a human factor that gets in the way.

 

[Disir]

The OP mistakes Thugocracies and Cronyism for the Free Market.

Just sayin'.

Let me reiterate the exact same little peice of information that I just gave. Economics is the softest science that there is. It's all theory. If you have not figured this out by your fourth economics course then you are a lost cause.

 

[Indeependent]

That's all utter horseshit. However, it's not surprising that the likes of you would take the communist point of view. Russia did not overnight become a free market economy. State owned companies were not sold off to the highest bidders. The state owned industries continued for a long time while their government administrators were allowed to loot them. The government did not enforce property rights or prosecute fraud and extortion.

It's funny that you would blame the market for a process that was administered by the state. That is typically what commies like you do whenever one of your boondoggles collapses or gets exposed for what it is.

Of course there was corruption in Russia.
There's corruption everywhere.
What happened was that US companies started dealing with Mexico and Asia instead of Russia.

So you believe American companies were doing a lot of business with Russian companies before the Soviet Union collapsed?

Shmuck!...Reagan Worshipper!...Same thing.
Ronny PROMISED Russia he would welcome them with OPEN ARMS to the wonderful world of democracy and CAPITALISM if they would ONLY TAKE DOWN THAT WALL.

Guess what?
Ronny said, "Fuck you, Russia!" right off the bat and went to Mexico and Asia.

How fucking dumb are you?

 

[Quantum Windbag]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

I really don't know enough about what happened in Russia to explain in detail what you are getting wrong, but I do know that the government continued to subsidize under performing factories and that the vouchers issued to allow people to buy stock in the companies were pretty much useless. On top of that, the central bank overreacted to the demand for money and the resulting hyperinflation pretty much wiped out the emerging middle class.

I am sure you think that proves the free market failed, but all I see is a lack of a free market and government interference causing massive problems. If I thought you were a serious person, and not just an idiot, I might take the time to look up resources to educate myself, and you, on why the 1990s market in Russia failed, but I am 100% sure you really don't care.

Then you don't know what you are talking about. Waiting for you to drum up excuses is a waste of my time. If you haven't figured out by your fourth economic class that it is all theory then you are merely a tool. It looks beautiful on paper but there is a human factor that gets in the way.

I know more than you because I took a few minutes to look into it before I responded, all you did was link to a SuperPAC, which is exceedingly ironic considering that you think corporations are evil.

 

[Disir]

We can see this devastation in terms of the institutions of the land and the mind in Africa. One of the key elements of neoliberal policies is to turn communal land given over to subsistence into "private'' property at whatever cost. This ''Great Transformation'' or "New Enclosure'' has been essential for all previous cycles of capitalist development and, if there was to be growth and consistent profitability in Africa, communalism and subsistence agriculture must be ended with prejudice (Federici 1992). It so happens, however, that Africa is the region of the planet that subsistence agriculture and communal property had its most extensive roots, and since the end of direct colonialism, has even expanded. Therefore, neoliberalism systematically appllied with the force of the state behind it would have its gravest consequences in the invaluable "entitlement" rights to food in a regime where these rights were justified on the access to land through
communal times (Sen 1981 ). It would inevitably produce a crisis of social reproduction whose causes one must trace in the often invisible struggles of women and unwaged indigenous peoples resisting the total imposition of the commodity form on their lives ( since such an imposition would drive them out of existence ) (Caffentzis 1999)

It is here that the neoliberal theory of the rational individual choosing to maximize his/her utility has its most problematic consequences. Robert Bates has made his career out of applying the
essence of neoliberal theory to African ''peasants" in the face of those who have claimed that African have values that are somehow anthropological curiosities. There is not doubt that African rural farmers are prudent and resourceful in their efforts.(4) But, contra Bates, prudence and resourcefulness does not make one a homo economicus , embracing the laws of the market as if emanating from the gods only to be thwarted by governmental policies (Bates 1983: 107-133). On the contrary, it would be unreasonable for African farmers not to resist having to pay rent on lands which they consider their own, or having to repay loans which they did not contract, or having to settle for wages not even sufficient for subsistence (Caffentzis 1995: 17). In fact, given their situation, it is quite rational for African farmers (especially women) to show a preference for communal networks of production, far from being sentimental throwbacks to pre-modern modes
of production, they are often the only guarantees they have of subsistence. In other words, they constitute a real use-value wealth that is not easily turned into exchange value.

Neoliberalism's consequences for the institutions of the mind in Africa can be seen in the devastation of the post-colonial university systems which were literally created ab novo after the departure of the colonialists. The neoliberal policies of the World Bank, for example, have consistently attacked the access of the higher education of the working class youth of Africa by demanding that universities slash subsidies to students and dramatically increase tuition fees. For the neoliberal vision of education is one which sees it as a commodity like any other and therefore should be paid by the consumer (Alchian 1977). It has resulted in a policy of academic exterminism in the context of Africa that was fought against by students up and down the continent between 1985 and today in hundreds of strikes demonstrations and riots (Federici and Caffentzis 2000).

By insisting on allowing funding only for basic education and demanding dramatic defunding of universities two results inevitably have followed. First, the quantity and quality of teachers in the primary and secondary schools, who are taught in the tertiary level, is threatened. As I pointed out a decade ago:

If the student-teacher ratio at the primary level is to be kept constant and the number of primary students is to increase by 5% a year, and if 5% of primary school teachers leave every year ( due to retirement, sickness, or alternative employment) then the rate of yearly influx of teachers from the tertiary Ievel must be 10%. A mathematical simulation, using standard figures found in Africa, shows that tertiary enrollment rates of 1% cannot even keep a semblence of pace. In effect by advising the reducation of of funding for higher education, the World Bank is subverting its own alleged objective: the expansion and improvement of primary education (Caffentzis 2000a: 11).

Second, the defunding of indigenous and autonomous research and development in the natural and social sciences has meant that scientists, in order to carry on their work, have to become hired hands in research projects determined by the interests of multinational pharmaceutical companies or private European or North American foundations (like the Rockefeller Foundation). As a consequence, the national universities are no longer in a position to protect the indigenous knowledge of the environment, the body and mind in different countries of Africa, since their personnel often cannot get any funding from their own state to do the research vital for the people of the land (Caffentzis 2000b).

The theft of land and knowledge that is the aim of neoliberal policies has been proceeding quite effectively under the aegis of neoliberal policies, but it has been challenged from the youths seizing control of the oil rigs on the Niger Delta to the hundreds of university student strikes and demonstrations against Structural Adjustment in the cities across the African continent. This is an
anti-globalization struggle coming from the "grass roots'' that has been going on since the mid-1980s, long before the ''Battle of Seattle " in 1999 and the subsequent demonstrations in Washington, Prague, Quebec and Genoa. Its story shows us that the movement against neoliberal globalization is no the expression of a small minority of well-to-do Europeans and America but rather has its driving force in a life-and-death struggle against the apocalyptic consequences of business-as-usual practices.

This explanation of the banal insistence on apocalyptic consequences puts the question of negotiations in a crisis. How can one negotiate with those who knowingly have incorporated the death of millions as an element in their strategy and deny their obvious complicity? Theirs is clearly a strategy of ''terror from above'' and poses a deep ethical problem. The representatives of the G6B must take into account age-old adage, ''One cannot negotiate with terrorists,'' simply because genuine negotiations involve the recognition of the autonomy of the other after the end of the negotiation But according to this analysis, the officials of the World Bank, the IMF and the G7 are those who bargain on the basis of terror and do not recognize the right of others to live outside the commodified logic of neoliberalism. This puts the ones who call for negotiations with the World Bank, IMF and G7 in an ethical predicament.(5) It is this dilemma that had led to the Seattle tactic of attempting to blockade the illegitimate meetings of those conspiring to carry on their devastating campaigns against the peoples and the environment of the planet. It expressed the determination not to let the decisions of these gatherings to be given the tacit approval of social silence. At the very least, the protesters can say , ''Not in my name! " and have put a good faith effort, supported by natural law theory , to stop a crime that is taking place before . But since the escalation of the state repression last year in Gothenberg and Genoa and the subsequent post-September 11 change in the legal environment, the blockade tactic has been put into crisis (Federici and Caffentzis 2001).

The illegitimacy of these gatherings, however, remain. This is especially true of the G7. It is important to note that the govemments of the G7 comprise most of those that met in 1885 in Berlin to divide Afr‡ca up for colonial domination without instigating conflict among the colonizers. That is not the end of the similarity for, in effect, the G7 gatherings since the mid 1970s have been annual traveling Berlin Conferences meant to divide up the planet (without provoking war between the 21st-century colonizers). The G7 is as illegitimate now as its Berlin predecessor was in 1885. One wonders what would have happened to the "Scramble for Africa " if there was a f‡rm effort at the 1885 Berlin Conference or at the 1889 Anti-Slavery Conference in Brussels (which led to the enslavement of millions of Congolese) by the already growing anti-imperialist movement to stop the meetings from taking place.

We have gathered in Calgary to oppose this illegitimate gathering and pose other demands and alternatives for the future of the G6B. in the light of the apocalyptic consequences of neoliberalism in Africa supported and impelled by the G7, these demands cannot be more of the same business-as-usual.

It is not my place, of course, to speak for Africa or Africans. I can merely put forth two related demands that have emanated from Africa that have widespread support there--the end of the debt and the payment of reparations for the thefts of colonialism--which might be able to mark a radical change in history.

The international debt of African countries has been used to impose the neoliberal policies on African people, consequently, the elimination of the debt will not only make it possible for African goverments to stop the extraction of enormous amounts of social surplus to pay off the interest on debt that has often been contracted to merely pay off interest On previously contracted debt! The elimination of the debt will also liberate Africans from the whip that has been used to impose neoliberal, structural adjustment policies on them with the threat that refusal will lead to their removal from the world economy .

This demand has been voiced in many ways and by many organizations in the last decade. It has had an impact on the IMF, the World Bank and the G7 , of course. The HIPC initiative and the new Bush Administration turn to "grants'' instead of "loans" has been the most obvious reaction to the struggles that have put forward these demands. But these have been reforms in order to be able to continue business-as-usual and put off the day of reckoning.

Neoliberalism in Africa, Apocalyptic Failures and Business as Usual Practices | by George Caffentzis

The impact of failure.

I love it when the idiot that wants to tell me how stupid I am provides the perfect example of why he is wrong.

Neoliberalism was an economic philosophy that emerged among European liberal scholars in the 1930s attempting to trace a so-called ‘Third’ or ‘Middle Way’ between the conflicting philosophies of classical liberalism and collectivist central planning.[4] The impetus for this development arose from a desire to avoid repeating the economic failures of the early 1930s which conventional wisdom of the time tended to blame on unfettered capitalism. In the decades that followed, neoliberal theory tended to be at variance with the more laissez-faire doctrine of classical liberalism and promoted instead a market economy under the guidance and rules of a strong state, a model which came to be known as the social market economy.

Neoliberalism - Wikipedia, the free encyclopedia

A rose by any other name would smell as sweet.

 

[Disir]

I really don't know enough about what happened in Russia to explain in detail what you are getting wrong, but I do know that the government continued to subsidize under performing factories and that the vouchers issued to allow people to buy stock in the companies were pretty much useless. On top of that, the central bank overreacted to the demand for money and the resulting hyperinflation pretty much wiped out the emerging middle class.

I am sure you think that proves the free market failed, but all I see is a lack of a free market and government interference causing massive problems. If I thought you were a serious person, and not just an idiot, I might take the time to look up resources to educate myself, and you, on why the 1990s market in Russia failed, but I am 100% sure you really don't care.

Then you don't know what you are talking about. Waiting for you to drum up excuses is a waste of my time. If you haven't figured out by your fourth economic class that it is all theory then you are merely a tool. It looks beautiful on paper but there is a human factor that gets in the way.

I know more than you because I took a few minutes to look into it before I responded, all you did was link to a SuperPAC, which is exceedingly ironic considering that you think corporations are evil.

You don't know shit. Don't put words in my mouth, hoss. Although, that windbag part suits you.

 

[Quantum Windbag]

Then you don't know what you are talking about. Waiting for you to drum up excuses is a waste of my time. If you haven't figured out by your fourth economic class that it is all theory then you are merely a tool. It looks beautiful on paper but there is a human factor that gets in the way.

I know more than you because I took a few minutes to look into it before I responded, all you did was link to a SuperPAC, which is exceedingly ironic considering that you think corporations are evil.

You don't know shit. Don't put words in my mouth, hoss. Although, that windbag part suits you.

I am not the idiot that argued that European Socialism, aka neoliberalism, supports free markets, am I?

 

[Disir]

I know more than you because I took a few minutes to look into it before I responded, all you did was link to a SuperPAC, which is exceedingly ironic considering that you think corporations are evil.

You don't know shit. Don't put words in my mouth, hoss. Although, that windbag part suits you.

I am not the idiot that argued that European Socialism, aka neoliberalism, supports free markets, am I?

In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman.[5] Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.[6] The term neoliberal is now used mainly by those who are critical of legislative initiatives that push for free trade, deregulation, enhanced privatization, and an overall reduction in government control of the economy.[7]
Neoliberalism - Wikipedia, the free encyclopedia

 

[Quantum Windbag]

You don't know shit. Don't put words in my mouth, hoss. Although, that windbag part suits you.

I am not the idiot that argued that European Socialism, aka neoliberalism, supports free markets, am I?

In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman.[5] Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.[6] The term neoliberal is now used mainly by those who are critical of legislative initiatives that push for free trade, deregulation, enhanced privatization, and an overall reduction in government control of the economy.[7]
Neoliberalism - Wikipedia, the free encyclopedia

I have been pushing for all of those things for years, no one has ever called me a neoliberal. In fact, they usually call me a crazy right wing conservative.

Want to try again?

 

[JakeStarkey]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

That's all utter horseshit. However, it's not surprising that the likes of you would take the communist point of view. Russia did not overnight become a free market economy. State owned companies were not sold off to the highest bidders. The state owned industries continued for a long time while their government administrators were allowed to loot them. The government did not enforce property rights or prosecute fraud and extortion.

It's funny that you would blame the market for a process that was administered by the state. That is typically what commies like you do whenever one of your boondoggles collapses or gets exposed for what it is.

bripat, you, as a confused commie anarchist, may talk all you want, and we still know you have not a cent to add to the pile.

 

[C_Clayton_Jones]

Free Market Failures

Pity these markets weren’t in the United States, where necessary and proper regulatory policies would have improved their likelihood of success.

 

[Disir]

I am not the idiot that argued that European Socialism, aka neoliberalism, supports free markets, am I?

In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman.[5] Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.[6] The term neoliberal is now used mainly by those who are critical of legislative initiatives that push for free trade, deregulation, enhanced privatization, and an overall reduction in government control of the economy.[7]
Neoliberalism - Wikipedia, the free encyclopedia

I have been pushing for all of those things for years, no one has ever called me a neoliberal. In fact, they usually call me a crazy right wing conservative.

Want to try again?

No. I want you to say what you wrote out loud and try again.

 

[HelenaHandbag]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

When free market ideas fail, the go away.

When government fails, they just whine about not having enough money and never, ever go away.

 

[Disir]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

When free market ideas fail, the go away.

When government fails, they just whine about not having enough money and never, ever go away.

That isn't how it works. But, it makes a great bumper sticker.

 

[HelenaHandbag]

Can you name any failure of a federal bureaucracy that has been done away with?

Nope.

More often than not, the failure of bureaucracy is pointed to as evidence that even more of it is called for.

You could never get away with that in the free market.

 

[JakeStarkey]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

When free market ideas fail, the go away.

When government fails, they just whine about not having enough money and never, ever go away.

Helena you are no one's political or economic philosopher.

No one believes you

 

[HelenaHandbag]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.



The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

When free market ideas fail, the go away.

When government fails, they just whine about not having enough money and never, ever go away.

Helena you are no one's political or economic philosopher.

No one believes you

Oh

the​

IRONY! ​

 

[Darkwind]

I thought it would be both fun and enlightening to post the best free market fails.

My all time favorite happens to occur in Russia.

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?

Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.

The Oligarchy's Rule of Law: From Russia to Oklahoma

Now, you really want to know what makes this hysterical (in the insane laughter type of hysterical)?

This is Cato's board of directors:
Board of Directors | Cato Institute

This is ALEC
American Legislative Exchange Council - Limited Government · Free Markets · Federalism



The group of people buying legislation.........

I've got more. What do you have?

Do you want to know what is really hysterical?

When countries abandon free market principles, millions die!

Just ask Russia! Human secularists who followed the government only rule are responsible for more deaths than any other system in the history of the world..............combined!

 

[Disir]

Can you name any failure of a federal bureaucracy that has been done away with?

Nope.

More often than not, the failure of bureaucracy is pointed to as evidence that even more of it is called for.

You could never get away with that in the free market.

You mean like the toppling of governments or destruction of governments via the free market spread by the IMF and the World Bank? Or the purpose of International Republican Institute, the National Democratic Institute and Freedom House and currently USAID?

Shall we delve into the privatization failures in the US?

 

[Quantum Windbag]

In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman.[5] Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.[6] The term neoliberal is now used mainly by those who are critical of legislative initiatives that push for free trade, deregulation, enhanced privatization, and an overall reduction in government control of the economy.[7]
Neoliberalism - Wikipedia, the free encyclopedia

I have been pushing for all of those things for years, no one has ever called me a neoliberal. In fact, they usually call me a crazy right wing conservative.

Want to try again?

No. I want you to say what you wrote out loud and try again.

Will it change if I say it out loud?

I oppose government regulations of markets, support free trade, think government services should be privatized, and not a single person has ever called me a neoliberal.