Wednesday, July 19, 2017

The neoliberal period, part 2

As discussed in my last post, spending directed at helping the poor has increased, not declined, in the "neoliberal period" (since 1980).  What about regulation of business?  I found a study that gives estimates of federal spending on regulation since 1960.  It distinguishes between "social regulation," which "includes regulatory agencies that address issues related to "health, safety, and the environment" and "economic regulation," which "is more likely to be industry-specific."  Here are the figures for spending on economic and social regulation (excluding homeland security) in constant (2009) dollars.

Both types grew rapidly in the 1960s.  Spending on economic regulation has grown less rapidly since 1970, and spending on social regulation since 1980, but both have grown.  Of course, the economy has grown too--social regulation has stayed about the same relative to the economy as a whole, while economic regulation has grown somewhat.  This just measures the amount of spending, not the effect of regulation (and it doesn't count state and local spending), so the figures are just a rough estimate.  However, they aren't consistent with the claim that there's been a general move to the right.

So can we discard the whole idea of "neoliberalism"?  I wish the answer were yes, because I dislike the term (partly because there are too many "neo" and "post" terms already, and partly because it is bound to be confusing to most Americans, since the "liberalism" involved is pretty much the opposite of what we now mean by liberalism).  However, there is a germ of truth in it.  The report distinguished between "financial," "general business," and "industry-specific" regulation.  Spending on the first two increased pretty steadily, but spending on "industry-specific" regulation fell between 1970 and 1980, and didn't reach its 1970 level until 2000.  As a share of the economy, it's now less than it was in 1960.  At one time, there was a lot of regulation of prices and operations in industries like airlines, interstate trucking, and communications.  This was cut back in the late 1970s, and much of it hasn't been restored.  As I recall, the deregulation movement was supported by both conservatives and a significant number of liberals (who argued that regulatory agencies tended to be "captured" by the industries they were supposed to regulate).  You could say that the newer form of liberalism is more inclined to accept that markets are an effective way of producing goods and services, but not more inclined to accept the market distribution of income.  This is an important change, but it's not a simple move to the right.

1 comment:

  1. David J. LittleboyJuly 20, 2017 at 2:47 AM

    The PPACA involves an enormous increase in spending on the poor that you haven't mentioned in these two articles. I'd think adding those numbers in would change the analysis. Maybe.

    People who like to shout "neoliberal" (as a pejorative) tend to also badmouth Obamacare while never admitting that it's one of the largest transfers of wealth from the rich to the poor, like, ever. (Hint: To cut the taxes of the rich by 800 billion dollars (over 10 years), you have to already be taxing them by the 800 billion dollars in taxation on the rich Obamacare added.)

    (Sorry if I'm sounding critical here: it's not you I'm mad at, it's the idiots who shout "neoliberal".)