Neo liberalism is the idea that markets are self-correcting. For 40 years the belief that free markets allocate resources efficiently ruled.
Jack the Tycoon was king, and whatever was good for Jack was good tor Tom the Consumer and the Average Guy. This was termed market fundamentalism.
Another term was trickle down. Production was a top-down affair. The rich and wealthy ruled, and what was good for the families at the top — the 0.001 percent who owned the means of global production — was good for everyone else.
Market fundamentalism drove politics. Free market supremacy offered Margaret Thatcher and Ronald Reagan a vision and strategy to rule the world. Privatisation and liberalisation was the road to El Dorado.
Meanwhile, the role of central banks was inflation control. As long as inflation was under control the economy could be left alone to decide how resources were to be allocated.
However, there was a problem with the rule of the market. Political and economic power became concentrated at the top of the pyramid. Jack the Billionaire Investment Banker became best friends with Julius Caesar the politician. Soon, both engaged in a symbiotic relationship that became unhealthy. What was good for Jack became the task of Julius Caesar to ensure.
Party politics was driven by Jack’s billions.
Soon enough, the 0.001 percent controlled government policy to the detriment of the 90 percent. This ultimately generated public rage.
Economists believed that this rage would drive a return to communist- and socialist-type politics.
Paradoxically, wealth and power inequality went the other direction.
The rise of a new fascism termed “populism” saw the entrance into democratic politics of wannabe dictators and populist megalomaniacs such as Donald Trump and Nigel Farage in the West.
Populism saw the rise of a toxic street politics and the resurgence of racism and Nazism. The return to the pre-World War II world threatened to reverse the post-world war political order that generated peace and prosperity in the West for nearly 80 years.
As a result of the preceding, the economist Dr. Joseph Stiglitz and other experts believe a healthy separation between the political infrastructure and corporations must be legislated to allow for a more equitable politics. This separation is a pillar of the new proposed progressive capitalism.
Governments must be able to operate without the overwhelming influence of big business.
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