SCLG3601 Lecture Notes - Lecture 3: Ronald Coase, George Stigler, Richard Posner
4 Nov 2018
School
Department
Course
Professor
Lecture 3 part 2
1979 Margaret Thatcher
“There is no such thing as society, only individuals and families”
1980 Ronald Reagan
Government is not the solution to our problem: government is the problem
Chicago School of Economics or Chicago School Neoliberalism
●Dates back to 1940s, reaction to American New Deal (beginnings of American welfare
state), but real policy influence from 1960s onwards – Milton Friedman, Gary Becker,
George Stigler, Ronald Coase, Richard Posner…
●But neoliberal policy prescriptions extend to many areas – consumer protection laws,
environmental regulation laws, pharmaceutical and food regulations, welfare policy,
public services (push to privatize or outsource), schools (push to privatize or create
vouchers and charter schools), higher education (push to end free university tuition,
introduce student debt)
‘The Birth of Biopolitics’
●Looks at the rise of economic neoliberalism
●German ordoliberalism (German neoliberalism)
●Austrian neoliberalism (Hayek, von Mises)
●Chicago School neoliberalism
●Virginia school neoliberalism
●The theory of human capital
Neoliberalism is not the same thing as classical (nineteenth century) economic liberalism,
laissez faire economics
‘[W]e should not be under any illusion that today’s neoliberalism is, as is too often said, the
resurgence or recurrence of old forms of liberal economics which were formulated in the
eighteenth and nineteenth centuries and are now being reactivated’
Foucault, Birth of Biopolitics, 117
Neoliberalism is not laissez faire – accepts necessity of state intervention
“Neo-liberalism would accept the nineteenth century liberal emphasis on the fundamental
importance of the individual, but it would substitute for the nineteenth century goal of
laissez-faire as a means to this end, the goal of the competitive order. …The state would police
the system, establish conditions favorable to competition and prevent monopoly, provide a stable
monetary framework, and relieve acute misery and distress”
Milton Friedman, “Neoliberalism and its Prospects,” Farmand
(1951): 89-93
Neoliberalism focuses on competition not exchange...
●“The society regulated by reference to the market that the neo-liberals are thinking
about is a society in which the regulatory principle should not be so much the
exchange of commodities as the mechanisms of competition.... The homo
oeconomicus sought after is not the man of exchange or man the consumer; he is the
man of enterprise and production”
●Foucault. Birth of Biopolitics, p. 147
What is
specific to neoliberalism then?
“[On American neoliberalism] First, the generalization of the economic form of the market
beyond monetary exchanges functions in American neo-liberalism as a principle of
intelligibility and a principle of decipherment of social relationships and individual
behavior. This means that analysis in terms of the market economy or, in other words, of
supply and demand, can function as a schema which is applicable to non-economic
domains. And, thanks to this analytical schema or grid of intelligibility, it will be possible to
reveal in non-economic processes, relations and behavior a number of intelligible relations
which otherwise would not have appeared as such – a sort of economic analysis of the
non-economic.”
Document Summary
There is no such thing as society, only individuals and families . Government is not the solution to our problem: government is the problem. Chicago school of economics or chicago school neoliberalism. Dates back to 1940s, reaction to american new deal (beginnings of american welfare state), but real policy influence from 1960s onwards milton friedman, gary becker, Looks at the rise of economic neoliberalism. Neoliberalism is not the same thing laissez faire economics. Neoliberalism is not laissez faire accepts necessity of state intervention. Neo-liberalism importance of the individual, but it would substitute for the nineteenth century goal of laissez-faire as a means to this end, the goal of the competitive order. The state would police the system, establish conditions favorable to competition and prevent monopoly, provide a stable monetary framework, and relieve acute misery and distress . Would accept the nineteenth century liberal emphasis on the fundamental. Milton friedman, neoliberalism and its prospects, farmand (1951): 89-93.
