US Neoliberal Model: The Myths, The Toll

Mark Wiesbrot at MRZine lays out 4 top neoliberal myths about the neoliberal US economy, as well as 4 costs of living by those myths:

MYTH 1) Neoliberal policy in the US has encouraged entrepreneurship.
REALITY CHECK 1) Entrepreneurs are relatively rare in the US. The US has pretty much the lowest percentage of small businesses of all the high-income countries (CEPR 2009). Expensive private health care poses a profound disincentive to small business in the US.

MYTH 2) The US is a meritocracy with high economic/social mobility.
REALITY CHECK 2) The US has Latin American-style socio-economic sclerosis. The probability that an American can struggle her way out of her economic station is way below other affluent societies, thanks not only to the bankrupting cost of getting sick, but also to the US’s post-1970 privatization of educa$hun costs. Let’s all give a hand to the belligerent law’n’order uberalles politics of Reagan there, who helped us (re)learn that the free market ensures social stagnation just as efficiently as feudalism.

MYTH 3) Because they discipline labor, neoliberal policies make US production competitive in the world market.
REALITY CHECK 3) When not in economic crisis, the US trade deficit under neoliberal policies ballooned to very high 6% of GDP. Thanks to wealth concentration, escalating prices, and big debt, Americans were molded into big consumers, not competitive producers. China produces for the world. What neoliberal policies are designed to do in the US is make the US a secure place for global capitalists to keep/grow their wealth, by any means necessary.

MYTH 4) The US’s barely-regulated, “market-friendly,” financial system is most innovative and efficient.
REALITY CHECK 4) Regardless of the copious self-congratulation at the time (pre-crisis), the financial system wasn’t innovative. Gambling is as old as the hills. It was sort of “efficient” in a sense, a sense that is socially irrational, from a perspective of democracy, equality, and broad freedom. What the unregulated financial system was good at was using smoke and mirrors to draw wealth out of the broad society, facilitating increasing consumption costs alongside broadly stagnating incomes. Though neoliberals gave us a different song and dance, in truth an unregulated financial market doesn’t create wealth. Its function is to concentrate what wealth there is.

In exchange for living on this set of myths, Americans (and on point 4, the world) pay the following price:

1) Almost no holiday time, almost no affordable time off to care for family, community, and self. Almost no parental leave policies. Almost no sick days. In other words, Americans stagger through with the barest minimum of time and resources for social reproduction.

2) A medical system devoted to making profits, which costs twice what public health care systems cost yet produces worse health results, measured across health indicators such as longevity and infant mortality.

3) The highest inequality of all affluent countries. In social animals such as humans, inequality is the principal component of chronic stress and, in affluent countries, consequent damage to health.

4) Despite the lack of entrepreneurial or productive dynamism, Americans use double the energy and produce double the carbon emissions of other affluent peoples. This is principally due to the fact that Americans cannot take time off of work to enjoy less-energy-intensive leisure activities. The go-to methods used by the neoliberal model to improve productivity are to make people work longer hours and to blow through more natural assets. Thereby, Americans devastate the environment and create entropy more than anyone else on the planet–basically, at a horrifying pace.

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