What Makes Us Free?

What's the role of government in society? What do we mean when we talk about individual responsibility? What makes us free? 'Neoliberalism' might feel like a squishy term that's hard to define and understand. But this ideology, founded by a group of men in the Swiss Alps, is a political project that has dominated our economic system for decades. In the name of free market fundamentals, the forces behind neoliberalism act like an invisible hand, shaping almost every aspect of our lives. This episode originally ran as "Capitalism: What Makes Us Free? https://www.npr.org/2021/06/28/1011062075/capitalism-what-makes-us-free" Please add the following after each blurb on podcast and webpages: To access bonus episodes and listen to Throughline sponsor-free, subscribe to Throughline+ via Apple Podcasts or atplus.npr.org/throughline http://plus.npr.org/throughline. See pcm.adswizz.com https://pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. NPR Privacy Policy https://www.npr.org/about-npr/179878450/privacy-policy

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:17Rund Abdelfatah?

  Hey, it's Rund. One of the things I love about our show is how many of our episodes, past, present, and even future ones, remain so relevant to current events and questions many of us are asking ourselves. What's the role of government? Who pays for it? Who decides? It made us think of this episode about the so-called invisible hand behind it all.

• 0:54Speaker 02

  Look at this lead pencil.

• 0:58Speaker 02

  Literally thousands of people cooperated to make this pencil.

• 1:03Speaker 03

  These people have cooperated with one another, don't speak the same language. They're people of all different religions. They may hate one another.

• 1:14Speaker 02

  When you go down in the store and buy this pencil, you are, in effect, trading a few minutes of your time for a few seconds of the time of all those thousands of people.

• 1:27Speaker 03

  That's the miracle of the price system. Everybody is benefiting. There's been no central direction.

• 1:35Speaker 02

  It was the magic of the price system that brought them together and got them to cooperate to make this pencil so that you could have it for a trifling sum.

• 1:45Speaker 03

  It worked so well that ordinarily we're not aware of.

• 1:50Speaker 02

  That is why the operation of the free market is so essential, you see, but even more, to foster harmony and peace among the peoples of the world.

• 2:32Speaker 04

  On April 10th, 1947, a group of 39 economists, historians, and sociologists gathered in a conference room at a posh ski resort at Mont Pelerin, Switzerland. Glasses clinked, cigars burned, a mission statement was written.

• 2:49Speaker 05

  Over large stretches of the Earth's surface, essential conditions of human dignity and freedom have already disappeared.

• 2:57Speaker 05

  And others, they are under constant menace from the development of current tendencies of policy.

• 3:03Speaker 04

  What happened in that smoke-filled room over the course of a few days probably didn't feel all that consequential at the time. It probably just felt like any old conference. But this small gathering was a group of thinkers with really fringe ideas, so much so that they tucked away in the Swiss Alps to be able to freely talk about them.

• 3:21Speaker 05

  The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power.

• 3:29Speaker 04

  And from that meeting, they would start an organization called the Mont Pelerin Society, MPS. And the ideas discussed in that room more than 70 years ago would evolve and warp, and this is no exaggeration, come to shape the world we live in.

• 3:45Speaker 05

  Even that most precious possession of Western man, freedom of thought and expression, is threatened by the spread of queens.

• 3:53Speaker 04

  This is Friedrich Hayek.

• 3:55Speaker 05

  Which seek only to establish a position of power in which they can suppress and obliterate all views but their own.

• 4:02Speaker 04

  Hayek was the man who invited everyone to that first meeting at Mont Pelerin, which launched the Mont Pelerin Society. A society that would produce Pulitzer and Nobel Prize winners and members that would become political leaders and top advisors. They believed that liberty, freedom, was the most important thing, and that market capitalism had to be protected because free markets meant free people. These shared principles became a decades-long political project that influenced a long list of US politicians and presidents from both parties. But it didn't stop with politics. It's become an ideology that's reshaped our relationships to our government, each other, and our own selves. An ideology some people call neoliberalism.

• 4:49Speaker 04

  I'm Laine Catherine Levinson, and today on Throughline, a story about how a small group of determined people can change everything, and how the ideas thrown around in that Swiss hotel room came to dominate our way of life.

• 5:06Speaker 06

  This is Eric from Castleberry, Florida, and you're listening to Throughline from NPR. Stay tuned for the following announcements and messages from our sponsors.

• 5:17Speaker 00

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• 6:02Speaker 06

  Support for this podcast and the following message come from the Southern Environmental Law Center. No one voted for a dirty air. No one voted for polluted water. That's why S E L C is fighting back to defend the healthy environment everyone depends on, just as they've done for 40 years. Because clean air, clean water, and a healthy climate aren't political, they're fundamental. Learn more at selc.org.

• 6:27Speaker 07

  Part one, Go Tell It on the Mountain.

• 6:39Speaker 08

  Radicals and reactionaries gained power as people searched for leadership and answers.

• 6:45Speaker 04

  In the late 1920s, the economy of the United States collapsed. Nearly 9,000 banks failed. People lost everything.

• 6:54Speaker 08

  As frustration turned to fear and anger, people took to the streets. Communists led hunger marches in many big cities and attracted thousands. The week before Americans went to the polls in '32, 20,000 unemployed filled the streets of Chicago.

• 7:10Speaker 04

  In 1932, three and a half years into the Depression...

• 7:13Speaker 09

  First of all, let me assert my firm belief...

• 7:17Speaker 04

  Franklin D. Roosevelt, FDR, became president.

• 7:20Speaker 09

  That the only thing we have to fear is fear itself.

• 7:28Speaker 04

  And having nowhere to live and nothing to feed your kids, FDR knew the country was in fear, was in crisis, and he needed to act quick.

• 7:38Speaker 10

  To do so, he created the famous alphabetical agencies of the New Deal. Their purpose: to fight the Depression, to provide work and security.

• 7:48Speaker 04

  His government went hard, spending money and creating programs we still have today like Social Security, unemployment insurance, welfare, and food stamps. They also passed the National Industrial Recovery Act, which allowed the government to regulate industry and business. All of this was a huge change. The government was suddenly involved in the economy in a way it had never been before.

• 8:09Speaker 10

  And from Roosevelt's desk flowed a huge program of public works, pressing a button, he put into operation a great new system of dams, flood control, and electricity for the people.

• 8:26Speaker 04

  And that strategy pretty much worked. The US made it through the Great Depression, and after the start of World War II, the economy was more robust than ever.

• 8:35Speaker 11

  One of the things that the New Deal did was to really change the relationship of the ordinary Americans to the federal government.

• 8:42Speaker 04

  This is Lily Geismar.

• 8:43Speaker 11

  I'm a professor of history at Claremont McKenna College.

• 8:46Speaker 04

  She's also currently writing a book called...

• 8:48Speaker 11

  Left Behind: How the Democrats Failed to Solve Inequality.

• 8:54Speaker 04

  Lily says the success of FDR's policies sent a signal to the people that said, "Hey, the government's here for you."

• 9:00Speaker 11

  It engendered a tremendous faith in government. And I think that this was seen as the right approach by a large number of Americans. For many people, that's the idea, that you'd go into their houses and they'd have pictures of FDR up on their walls. I mean, that he played this really powerful role.

• 9:19Speaker 04

  But here's the thing. The history of the New Deal that most of us get today is pretty flat. The reality is not everybody enjoyed the benefits of these programs, especially Black Americans. But what it also did was piss a lot of people off. People who fundamentally disagreed with the government intervening in the economy. Even people across the world, like our guy Friedrich Hayek, was tearing his hair out.

• 9:43Speaker 12

  Hayek was arguably the most prominent and influential advocates for free markets in the North Atlantic world from the 1930s to the 1950s.

• 9:53Speaker 04

  This is Angus Bergen.

• 9:55Speaker 12

  I'm a historian at Johns Hopkins University.

• 9:58Speaker 04

  And an expert in all things Friedrich Hayek.

• 10:00Speaker 12

  He became the person who symbolized a reaction to the Great Depression that said, "No, we shouldn't engage in dramatic fiscal stimulus, certainly not in dramatic monetary stimulus to try to pull ourselves out of this situation. Rather, we should let events take their course. Because if we try to do anything dramatic, we're only going to end up, as he saw it, exacerbating a boom and bust cycle that would carry on in perpetuity."

• 10:28Speaker 05

  The basic conviction which has guided me in my efforts is that if the ideals in which I believe unite us and for which, in spite of abuse of the word, there is still no better name than liberal, are to have any chance of revival, a great intellectual task is, in the first instance, required before we can successfully meet the errors which govern the world today.

• 10:56Speaker 04

  Hayek was born in Austria in 1899 and would eventually live in London and later the US to pursue a career in economics.

• 11:03Speaker 12

  His whole life, he spoke with a pretty thick accent. He had kind of an aristocratic bearing.

• 11:08Speaker 04

  Hayek considered himself a liberal, not a liberal in the sense we think of it today, but what many call classically liberal, someone who believed in individual freedom, liberty, and free thought. So to him, FDR's policies had gone way too far.

• 11:24Speaker 12

  He and a lot of his colleagues hated things like the NRA.

• 11:28Speaker 04

  The National Recovery Administration, that NRA.

• 11:31Speaker 12

  And efforts by the government to proclaim what business should be doing, therefore interfering with what he saw as the inherent wisdom of individuals and business owners. Hayek was arguing in the very early 1930s that the appropriate response, in his words, to the Great Depression was to leave it to time to effect a permanent cure.

• 11:56Speaker 04

  That's a very bold statement because you're imagining people have no money, they're waiting on lines to get food, there's no jobs, there's no end in sight, and someone's saying, you know what the government should do to solve this? Nothing.

• 12:12Speaker 12

  Yes.

• 12:13Speaker 04

  What must have made Hayek's take sound even more out there was that by the 1940s, FDR's policies, combined with massive wartime production, had actually lifted people out of poverty and cemented the US as an economic powerhouse.

• 12:27Speaker 12

  Of course, people in situations of deep distress are going to be looking for solutions. And if you don't provide them with solutions, they're going to turn to somebody who does. And hence, Hayek was increasingly marginalized from his colleagues, and not that many economists shared his views. There is no lack of mentioning in Hayek's letters or his colleagues' letters just how marginalized they were. And so they are very preoccupied with their own sense of marginalization within their profession and a broader public.

• 13:05Speaker 05

  Our freedom of choice in a competitive society rests on the fact that if one person refuses to satisfy our wishes, we can turn to another.

• 13:14Speaker 04

  Hayek didn't quit. In 1944, he released a book, or maybe you could call it a manifesto or Bible.

• 13:22Speaker 05

  But if we face a monopolist, we are at his absolute mercy.

• 13:25Speaker 04

  It was called "The Road to Serfdom."

• 13:28Speaker 05

  And an authority directing the whole economic system of the country would be the most powerful monopolist conceivable.

• 13:35Speaker 04

  That title meant to hit a nerve. Serfdom meant economic servitude. Very not free.

• 13:42Speaker 12

  The message that a lot of people took from it is that, you know, one, two, three steps towards government intervention in response to a crisis or in other kinds of circumstances that are seen as reasonable solutions to problems that people were facing at that time would eventually lead us down a pathway to socialism.

• 14:01Speaker 05

  It would have complete power to decide what we are to be given and on what terms. It would not only decide what commodities and services were to be available and in what quantities. It would be able to direct their distributions between districts and groups and could, if it wished, discriminate between persons to any degree it liked.

• 14:21Speaker 12

  And the key moment in that, in Hayek becoming a public figure in the United States, was the condensation of that book by Reader's Digest. And Reader's Digest might seem kind of irrelevant to us today, but it was the largest circulation magazine in the United States at the time. It had over 8 million subscribers. Lots of people were reading it, and it was presented as the lead article, as this condensation of the book. And many, many people encountered Hayek's ideas.

• 14:52Speaker 04

  Almost overnight, Hayek went from an obscure aristocratic Austrian economist to a public symbol in the US who represented a type of New Deal resistance, which you'd think would make him thrilled. But Hayek was actually kind of frustrated. He felt like most people didn't really understand what he was trying to say.

• 15:09Speaker 12

  Reader's Digest stripped away a lot of the nuance. And he expressed himself a frustration that he thought many readers took it the wrong way. He thought many readers were saying that Hayek thinks that the market is always right and we shouldn't have any form of government intervention in the economy. And if you closely read the actual book, The Road to Serfdom, not this condensed version, you find all kinds of caveats. He's willing to acknowledge that the government does have a role in providing food and shelter, certainly regulating businesses for potential environmental damage, pollution, things like that.

• 15:45Speaker 04

  The government does have a role, to an extent, which Hayek felt was a fine line and a dangerous one, because people who got excited about government subsidies could get excited about socialism, his biggest fear.

• 15:57Speaker 12

  He wanted to persuade these people who might otherwise be pulled in by what struck them as deeply compelling ideas that, no, if we lose this core element of the market mechanism, we're going to lose many things that we hold dear. We'll, in a sense, throw the baby out with the bathwater.

• 16:24Speaker 04

  Way before he even published The Road to Serfdom, Hayek had been fantasizing about bringing together a big meeting of scholars who agreed with him.

• 16:31Speaker 12

  In order to exchange ideas with one another and hopefully, as he saw it, plant the seeds for a revival of liberal social philosophy. He had this new celebrity in the United States as a result of The Road to Serfdom, and he wanted to capitalize on that momentum to garner a little bit of funding and maybe to convince colleagues from a range of different national environments to come together and talk about their ideas.

• 17:02Speaker 04

  He found a place in the Swiss Alps, Mont Pelerin, to host the meeting. And he sent out a bunch of invites. Slowly, the responses started coming in. Dozens of people were on board, some making plans to cross the Atlantic Ocean for the first time since the end of the war. This was a big deal, and it was all lining up. And finally, this group of people from all over the world, almost all men, found themselves in a room being greeted by Hayek.

• 17:33Speaker 05

  I must confess that now, when the moment has arrived, to which I have so long looked forward, the feeling of intense gratitude to all of you is strongly mixed by an acute sense of astonishment at my own presumption and audacity in setting all this in motion.

• 17:49Speaker 05

  I have taken on me in asking you to give up too much of your time and energy for what you might well reward as a wild experiment.

• 17:59Speaker 04

  The wild experiment had begun. Hayek was living his dream, except...

• 18:04Speaker 12

  The meeting itself actually wasn't that great.

• 18:11Speaker 04

  I mean, it was a conference, so, you know, it kind of sucked.

• 18:14Speaker 12

  The reality is that sessions are boring. Conversations about ideas very often don't really go very far, right? They end up being a little more superficial than the people who planned the meeting hoped that they would be. Why then is it important? Why do we talk a lot about this 1947 meeting despite that? And I think even if conferences are sometimes disappointing in their actual ideas that are discussed, they're very important for networking and for creating a sense of solidarity, a sense of community, established lines of communication. So it's less actually the conversations themselves in the rooms in this hotel overlooking

• 18:55Speaker 12

  a lake and Alps in Mont Pelerin that we should see as transformative, so much as the connections that people made while they were there.

• 19:04Speaker 04

  And that's exactly what happened. The meeting launched the Mont Pelerin Society, which kept all these scholars connected as they went on in their careers. It was a way for these fringe ideas to keep cooking on a low burner, a slow boil.

• 19:18Speaker 13

  Those few of us who believed in freedom and free markets and minimum government were regarded as nuts over on an extreme fringe.

• 19:29Speaker 04

  Remember that guy talking about a pencil at the top of the episode? That's this guy, Milton Friedman, one of the people at that first Mont Pelerin Society meeting.

• 19:38Speaker 13

  Add to that that this was my first trip overseas, my first trip out of the United States, so that it was a very memorable meeting indeed. It was a remarkable collection. You have to give Friedrich Hayek full credit for having the idea of organizing society and for being able to make the physical arrangements to do so.

• 20:01Speaker 04

  When we come back, Milton Friedman takes Hayek's ideas to the people, and the people start to listen.

• 20:13Speaker 14

  This is David Owens from Danville, Alabama. You're listening to Throughlon from NPR.

• 20:18Speaker 00

  Stay tuned for the following announcements and messages from our sponsors.

• 20:22Speaker 06

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• 21:15Speaker 06

  Support for this podcast and the following message come from the Southern Environmental Law Center. No one voted for a dirty air. No one voted for polluted water. That's why S E L C is fighting back to defend the healthy environment everyone depends on, just as they've done for 40 years. Because clean air, clean water, and a healthy climate aren't political, they're fundamental. Learn more at S E L C dot org. Part Two, The Eclipse.

• 21:46Speaker 04

  Dear Ed.

• 21:48Speaker 15

  President Dwight Eisenhower, in a letter to his brother Edgar Eisenhower, November 8, 1954.

• 21:55Speaker 04

  Now, it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions. But to attain any success, it is quite clear that the federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a splinter group, of course, that believes you can do these things. Among them are an occasional politician or businessman. Their number is negligible, and they are stupid.

• 22:51Speaker 04

  If there's one word that's often used to sum up the 1950s, it's boom.

• 23:03Speaker 11

  There's a level of just general prosperity that has never been really seen before.

• 23:12Speaker 11

  You had a car for the first time, you could take vacation, you could support a family on a single breadwinner salary, you lived a kind of middle-class lifestyle.

• 23:22Speaker 04

  If you were white. Remember, the New Deal was exclusionary, and black people and people in farming and domestic service jobs were explicitly left out of programs that helped you buy homes and get social security, things that helped people build wealth. At the same time, the 1950s was pretty much when our ideas about what it meant to be middle-class in the US came into being. And most people agreed the New Deal policies were responsible for it. Lilly Geismar says you couldn't really find a Democrat or Republican who openly disagreed with that.

• 23:53Speaker 11

  Amongst the political parties, there was relative consensus that these were the kind of ideas that were sort of broadly governing society.

• 24:02Speaker 03

  The subject of the talk tonight is the role of government in a free society. And I think in discussing that subject, the first thing you have to do is to emphasize the very different meanings that free has.

• 24:21Speaker 04

  But, of course, not everyone was on board.

• 24:25Speaker 16

  Would you please join me in welcoming Dr. Milton Friedman?

• 24:34Speaker 12

  So when you ask who is Milton Friedman?

• 24:38Speaker 12

  Despite having much in common with Hayek, as far as his ideas are concerned, personally, he was a real contrast. He was not coming from this kind of aristocratic, highly cultured Austrian background that Hayek was coming from. He was coming from a much more marginalized community.

• 24:57Speaker 04

  Milton Friedman's family didn't have a lot of money. He was raised by working-class Jewish immigrants in New Jersey at a time when most people didn't have a lot of money, since the Depression was in full swing by the time he got his masters in the 1930s. This financial strain inspired Friedman to study economics. After school, he took a job working in the government, FDR's New Deal government, and eventually got a job at the University of Chicago, where he got connected to Hayek, and started to develop different views from his former government colleagues. And that's what landed him an invitation to that Mont Pelerin meeting in 1947, where finally, he was amongst friends.

• 25:35Speaker 12

  Friedman later described it as "a unique environment where you could say things without being worried that somebody was going to stab you in the back." There was a sense that you were surrounded by colleagues who you could trust to some degree.

• 25:49Speaker 04

  A safe space that emboldened Friedman to go public with his fringe beliefs. In 1951, he published an essay called-

• 25:57Speaker 12

  "Neoliberalism and Its Prospects." It really encapsulates a lot of the ideology of this meeting at Mont Pelerin in 1947.

• 26:04Speaker 03

  First of all, the government doesn't have any responsibility. People have responsibility. This building doesn't have responsibility. You and I have responsibility. People have responsibility. We have been becoming an over-governed and over-regulated society. We have been moving down the road that Friedrich Hayek, in his great book, called "The Road to Serfdom." We do not have to continue down that road. We can be the masters of our own destiny.

• 26:36Speaker 04

  Friedman was carrying the Mont Pelerin torch and turning Hayek's complex ideas about privatization, deregulation, and individual freedom into bite-sized snacks.

• 26:46Speaker 12

  And Friedman turned out to be great at that, taking very complicated ideas and conversations and packaging them to make them sound very simple and compelling in ways that the normal people could understand.

• 27:02Speaker 12

  He understood the rhetorical power of simplicity.

• 27:06Speaker 04

  And could translate an entire ideology into one simple idea.

• 27:10Speaker 12

  The market could solve problems that the government couldn't.

• 27:14Speaker 04

  And this applied to almost everything.

• 27:17Speaker 12

  In his utopian world, he was pretty clear there would be no public education.

• 27:21Speaker 04

  He pushed for school vouchers.

• 27:23Speaker 02

  Market competition is the surest way to improve the quality and promote innovation in education, as in every other field.

• 27:34Speaker 04

  And something called the negative income tax, an alternative to welfare that simply gave people money through the tax code.

• 27:41Speaker 03

  With the positive income tax, you're entitled to a certain amount of personal exemptions and deductions. And above that amount, you pay tax. But suppose you have no income. Under a negative income tax, a fraction of your unused exemptions would be paid to you by the government, guaranteeing at least a minimum income.

• 27:59Speaker 04

  He clearly liked the idea of giving people money so they could meet their basic needs. But health insurance? Not so much.

• 28:06Speaker 03

  Let's not call it national health insurance. It's not national health insurance. There's nothing national about it. It's for individual people. There's no health about it because it'll make medical care less good. It'll make the health of the American people worse. And there's no insurance.

• 28:22Speaker 12

  So he talked about abolishing things like the FDA, abolishing national parks, abolishing the estate tax, abolishing the charitable tax exemption, and just say, we should throw this stuff out. He could say, "I could share your desire to, you know, improve the well-being of people who are in bad economic circumstances, but I have this different, more economically efficient way to do so."

• 28:44Speaker 04

  "And you know what's not economically efficient," said Friedman, "the federal government. If you put the government in charge of the Sahara Desert," Friedman said, "in five years, there'd be a shortage of sand." The guy knew how to make a point, and he talked to whoever'd listen. And so, over time, he went from unknown academic to TV celebrity. He went on talk shows.

• 29:04Speaker 17

  Here he comes again, Milton Friedman. And, boy, does he make an entrance now, because this is a blockbuster book, Free to Choose, which--

• 29:14Speaker 04

  A bestselling book led to a 10-part, 10-hour-long PBS special, also called Free to Choose, which had an impact on everyone, from Phil Donahue to Arnold Schwarzenegger.

• 29:27Speaker 18

  Being free to choose for me means being free to make your own decisions, free to live your own life, pursue your own goals, chase your own rainbow, without the government breathing down on your neck or standing on your shoes.

• 29:44Speaker 04

  He had a regular column in Newsweek magazine, wrote a guest essay for The New York Times, and lectured on any podium put in front of him. He was everywhere, all the time. If you turned on the TV, there was Friedman. If you walked into a bookstore, there was Friedman. If you opened the paper, there was Friedman. The guy was just always there.

• 30:04Speaker 03

  The more successful a capitalist society is, the better. There has never in history been a more effective machine for eliminating poverty than the free enterprise system and the free market.

• 30:13Speaker 04

  And always on-brand.

• 30:16Speaker 03

  The armies of bureaucrats administering our lives, making our decisions, spending our money, all supposedly for our good. The people who get on welfare lose their human independence and feeling of dignity. A society that aims for equality before liberty will end up with neither equality nor liberty. I'm a believer in freedom.

• 30:46Speaker 04

  It was a rallying cry and a daring one because it was a direct attack against a system that Americans were told worked. So why listen? Well, you wouldn't unless all of a sudden you felt like things weren't working so well anymore.

• 31:01Speaker 11

  It sort of hit at this particular moment.

• 31:05Speaker 04

  The 70s. The Vietnam War was winding down, the high of the post-war boom was wearing off, and the economy was starting to tank.

• 31:13Speaker 11

  But the kind of straw that really hits in 1973 to cause a recession is the oil crisis.

• 31:18Speaker 19

  Good evening. The Middle East war produced developments all over the world today. The oil-producing countries of the Arab world decided to use their oil as a political weapon. How much have you got left in there?

• 31:32Speaker 20

  None. It's empty. There is no oil. There's none to get and they can't deliver any.

• 31:39Speaker 19

  You worried?

• 31:40Speaker 20

  You're damn right. And when you've got babies, you're gonna have to worry.

• 31:44Speaker 21

  I just couldn't imagine something like this would happen in America.

• 31:50Speaker 11

  When there's this lack of oil, it also sort of just creates sort of economic havoc and leads to rising inflation and rising unemployment. And so this is what we call, was known by the great phrase of stagflation.

• 32:03Speaker 04

  I'm a waitress. How long have I been out of work? Since June 20th of 73.

• 32:09Speaker 11

  This really affected everyday life. The cost of things just went up multiple. So all of these things, they're really feeling it.

• 32:18Speaker 07

  You say you're a furniture manufacturer. For how long? About 24 years. Have you ever seen it this bad? Yes, during the Depression.

• 32:33Speaker 11

  That really creates economic hardship, but I think creates a sort of psychological and intellectual, just sort of free fall. I mean, the combination of the recession, coupled with all of those events, opens up kind of a new landscape and brings in kind of a search for new types of approaches. And people look to this sort of market-oriented ideas of people like Hayek and then also Milton Friedman, and they gain new attention.

• 33:00Speaker 12

  Friedman was very explicit about the importance of crisis to people's mentality, people's willingness to test out new ideas. He would say explicitly that some of my ideas seem extreme and nobody's going to implement them right away, but the next time that a crisis hits, they'll be ready to hand. And people are looking around for a solution and they'll say, what we've been doing in the past hasn't worked, so let's try out something different. You put out ideas with kind of a long-term vision for political change. They marinate and then something will happen that will make a marginal idea seem newly possible.

• 33:41Speaker 04

  Over the course of the 1970s, there's a shift away from government, a government that was looking less and less reliable, and towards markets as the solution to the country's problems. And suddenly, those fringe ideas and thinkers that came together at Mont Pelerin weren't looking so fringe anymore.

• 33:58Speaker 22

  I don't think it's an exaggeration to call Milton Friedman's "free to choose" a survival kit for you, for our nation, and for freedom.

• 34:08Speaker 04

  And there's a president who's probably most well-known for selling that message to the American people, a president who became a Milton Friedman fanboy.

• 34:17Speaker 23

  Government is not the solution to our problem. Government is the problem.

• 34:24Speaker 04

  Ronald Reagan is basically Friedman in presidential form, and his supply-side trickle-down economics, or Reaganomics, was inspired and literally advised by Friedman. So it makes sense that he's often credited as the guy who took a sledgehammer to taxes, regulation, and welfare, the pillars of the New Deal. But he wasn't the first.

• 34:46Speaker 24

  I know that the American people are still sick and tired of federal paperwork and red tape.

• 34:55Speaker 04

  Before Reagan, there was a soft-spoken peanut farmer from Georgia named Jimmy Carter.

• 35:00Speaker 25

  Bit by bit, we are chopping down the thicket of unnecessary federal regulations by which government too often interferes in our personal lives and our personal business.

• 35:12Speaker 11

  He implements a lot of the things that are sort of associated with Reagan.

• 35:17Speaker 04

  Today, Carter's kind of remembered as a progressive. I mean, he put solar panels on the White House roof in 1980, but he also deregulated the trucking industry, the airline industry. He slashed taxes, particularly capital gains taxes, which helped investors over everyone else, and all with the full support of his fellow Democrats.

• 35:38Speaker 11

  One of their major slogans was that the solutions of the '30s can't solve the problems of the '70s. And then they changed that to the solutions of the '30s can't solve the problems of the '80s. And it was the solution of the '30s can't solve the problems of the '90s.

• 35:52Speaker 25

  While the evening is young, and we don't know yet what the final tally will be, I think we know enough to say with some certainty that New Hampshire tonight has made Bill Clinton to come back in.

• 36:20Speaker 04

  Coming up, the left takes a sharp right turn and doesn't look back.

• 36:45Speaker 00

  This is Andrea Emerson in Portland, Oregon, and you're listening to Throughline from NPR. Stay tuned for the following announcements and messages from our sponsors.

• 36:55Speaker 06

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• 37:20Speaker 00

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• 37:34Speaker 06

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• 37:59Speaker 07

  Part three. The air we breathe, the water we drink.

• 38:06Speaker 26

  OK, forget the fun and games. It's time to get serious. And for dads to be truly inspired, they need to be truly wired.

• 38:14Speaker 04

  This is from a 1994 TV segment about the hottest new gift idea for Father's Day.

• 38:20Speaker 26

  Called the internet. You can send and receive mail, to and from people all over the world. Dad can log on 24 hours a day and find out what the email mailman has dropped off. Just reading my email.

• 38:34Speaker 04

  And now that I think about it, a bunch of dorky dads excited about reading their email from home is the perfect way to picture the 90s tech boom.

• 38:41Speaker 26

  Boom, boom, bingo. I'm making money.

• 38:45Speaker 04

  The World Wide Web, powered by entrepreneurs, powered by you.

• 38:50Speaker 11

  Entrepreneurialism and the tech industry, that's the kind of way to bring about economic growth.

• 38:57Speaker 04

  And the Democrats were fully on board. After years of Reagan and Bush, the party was looking inward, wondering why they just kept losing. They decided that some of their core values, welfare, labor unions, oversight, were bringing them down. And they wanted to win.

• 39:13Speaker 11

  And there's this idea of this kind of political realignment that's going on in the United States towards the Republicans. And Bill Clinton becomes the kind of real centerpiece of that approach.

• 39:24Speaker 27

  There are a new generation of Democrats, Bill Clinton and Al Gore, and they don't think the way the old Democratic Party did. They've called for an end to welfare as we know it, so welfare can be a second chance, not a way of life. They've sent a strong signal to criminals by supporting--

• 39:37Speaker 11

  Okay, so Bill Clinton is part of this orbit of Democrats. He's the governor of Arkansas. He becomes governor quite young, and he's trying to kind of bring in new solutions.

• 39:46Speaker 28

  Let us all join together in welcoming the next president of the United States of America, Governor Bill Clinton, Hillary Clinton, and Chelsea Clinton.

• 40:01Speaker 11

  Wins in 1992, wins back a lot of the kind of white, moderate suburbanites and white, lower-middle-class and working-class voters who've been kind of drifting towards the Republican Party. And comes into office at a moment of kind of the end of the Cold War and a sense that these ideas of kind of liberal democracy and free-market capitalism are the best approach.

• 40:24Speaker 25

  This election is a clarion call for our country to face the challenges of the end of the Cold War and the beginning of the next century.

• 40:34Speaker 25

  To restore growth to our country and opportunity to our people, to empower our own people so that they can take more responsibility for their own lives.

• 40:47Speaker 11

  So many of the bills have the word responsibility in them because of this idea of like, people, government will be responsible in some ways, but like it's a reciprocal relationship and people have to be responsible for themselves.

• 40:57Speaker 04

  So like, we'll help you, but only up to a point. Then you're on your own. But you'll be better off because you'll be able to make more money that way than living off a government handout. This thinking basically describes Clinton's signature welfare-to-work reform, which pulled the plug on welfare services after two years.

• 41:15Speaker 11

  And that is seen symbolically as a sort of change in the New Deal.

• 41:20Speaker 25

  It gives us a chance we haven't had before to break the cycle of dependency that has existed for millions and millions of our fellow citizens, exiling them from the world of work that gives structure, meaning, and dignity to most of our lives.

• 41:41Speaker 11

  Another famous nail in the coffin of New Deal liberalism passed under Clinton is the repeal of the Glass-Steagall Act, which created a separation between commercial and financial banks.

• 41:51Speaker 04

  The Glass-Steagall Act was a signature law of the New Deal era that was created in direct response to the 1929 stock market crash. The main goal of the act was to not let that ever happen again by severing ties between banking and investing activities. It was so that 9,000 banks never failed again because that's literally what happened during the Depression. But when key provisions of Glass-Steagall were repealed under Clinton to boost the economy, it felt like a slap in the face for FDR's legacy, making Clinton's message loud and clear.

• 42:24Speaker 25

  The era of big government is over.

• 42:27Speaker 11

  And so you have a Democratic president saying that, and that sounds very similar to what Ronald Reagan was saying.

• 42:33Speaker 23

  Government is not the solution to our problem. Government is the problem.

• 42:39Speaker 25

  I say again, the era of big government is over.

• 42:43Speaker 04

  By the 90s, these two supposedly rival political parties seemed to be moving in lockstep. Carter, Reagan, and Clinton all started to sound kind of the same, kind of like a bald, five-foot-tall man from New Jersey who never held political office but had more influence on America's economy than almost anyone else. They sounded like...

• 43:08Speaker 08

  Nope, Friedman.

• 43:10Speaker 04

  And when Friedman died in 2006, top Clinton adviser Larry Summers wrote an op-ed for the New York Times that said it plain and simple.

• 43:21Speaker 12

  Any honest Democrat will admit that we are now all Friedmanites. And so you can see right there, a kind of admission of the ways in which the common knowledge had shifted when you had the New Deal order to a neoliberal order. You have people on the left admitting that they are thinking alongside Friedman.

• 43:51Speaker 29

  I stand before you today to announce my candidacy for President of the United States of America.

• 44:00Speaker 11

  It's so funny, I think actually, if I remember correctly, there were lots of pictures when Obama came in of like him dressed like FDR, and there was this idea that he was going to be this like return, I think this pic, they do the time, they have done that many times, where they like have someone dressed as FDR, but they did it around Obama, and there was, I think there was a question, like what would the approach be? And I think in many ways Obama's policies were a continuation of the kind of Clinton approach. Many of the people who were in the Clinton White House came back under Obama, and many of the programs the Obama administration adopted were very pro-market and particularly pro-Wall Street.

• 44:34Speaker 04

  He was all about the marketplace, whether it came to healthcare, because the Affordable Care Act or Obamacare is a marketplace for healthcare, or schools, because like Clinton, he was a huge charter school advocate, and like Clinton, Obama was all about the hustle.

• 44:52Speaker 29

  It means we should support everyone who's willing to work, and every risk taker, an entrepreneur, who aspires to become the next Steve Jobs. Most new jobs are created in startups and small businesses, so let's pass an agenda that helps them succeed. Both parties agree on these ideas, so put them in a bill and get it on my desk this year.

• 45:16Speaker 04

  He made regular visits to Silicon Valley and teased Mark Zuckerberg like an old friend.

• 45:25Speaker 29

  My name is Barack Obama, and I'm the guy who got Mark to wear a jacket and tie. Thank you. I'm very proud of that.

• 45:39Speaker 15

  Second time.

• 45:41Speaker 29

  I know. I will say, and I hate to tell stories on Mark, but the first time at dinner

• 45:50Speaker 11

  I'm somebody who spends a lot of time on college campuses and like there's all this language about entrepreneurship and sort of being your own person and starting your own business, which many people look to as this kind of celebration of the moment. But that's actually like quite neoliberal in its thinking that you're in charge of yourself and that you're your own actor and that there's not that kind of you're not this sort of seeking it looking out for you and that you're somehow like empowered by that experience of like setting your own hours. And the other side of that is that you don't have the kind of typical protections in place, that you have no job security, you have no overtime, you have no health benefits. We're all doing lots of work and the idea that we're like more empowered by it, but like in fact, it's like it's it's creating other kinds of precarity and stress.

• 46:40Speaker 04

  Okay, we've been talking about economic policy for a while now, longer than I ever thought I'd talk about economic policy, maybe ever. And we've seen how this fringe movement won over both political parties, whether they ever named themselves as neoliberal or not. It made them different versions of the same thing in a lot of ways. But so what? How do these presidents talking about tax cuts and deregulation and free markets and individual responsibility and entrepreneurship, how does that actually affect our lives? This is what UC Berkeley poli sci professor Wendy Brown thinks about constantly.

• 47:15Speaker 30

  I've written on a lot of different topics, but on neoliberalism, I've written two books. One is called Undoing the Demos: Neoliberalism's Stealth Revolution.

• 47:25Speaker 04

  And the other is called In the Ruins of Neoliberalism.

• 47:28Speaker 30

  The Rise of Anti-Democratic Politics in the West.

• 47:32Speaker 04

  The reality is, we live in a country that's fully embraced the idea that the market can solve most of our problems. It's part of our national identity. And Wendy says that's creeped into our own personal identities and gotten inside our own heads.

• 47:49Speaker 30

  I take neoliberalism to be a worldview and a and a set of practices and a way of governing that is much larger than simply free market policies. And if you don't have an understanding of that as what has saturated our society, it becomes the air we breathe, the water we swim in, but we don't know what we're breathing and we don't know what we're swimming in.

• 48:17Speaker 30

  It is a way of conducting yourself that you imagine to simply be natural, but actually has been very specifically constructed and organized over the past 40 years.

• 48:33Speaker 30

  If you understand yourself as a bit of human capital, if you understand yourself in a fully economic way, it means you might approach your dating life or your educational life or your leisure time, not so much as a profit-making undertaking, but still as one to manage in economic terms and think about in economic metrics. So concretely, this means that you might think, "Well, I could take a vacation, but that would actually depreciate my chances of being noticed in the following six ways at work or in the dating scene

• 49:18Speaker 30

  or something like that, and it might depreciate my value in those domains, so this is not the right thing to do." Now, what's happened there? What's happened is that you have a human being who is thinking about everything they do in terms of their human capital value being enhanced or depreciated. Should I choose this partner to work with or that one? Should I date this person or that person? Not out of feeling, not out of desire, but out of human capital valuation. And that is a significant transformation of human beings.

• 50:00Speaker 31

  The point is, ladies and gentlemen, that greed, for lack of a better word, is good.

• 50:08Speaker 30

  This economization of our decisions and our ways of life, this is novel. This is what has been brought about by the transformation that neoliberalism has wrought into economizing everything in the public and social domains.

• 50:26Speaker 31

  Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

• 50:33Speaker 30

  I mean, this is basic Wall Street. And this is the basic Wall Street that has gone into all of our souls.

• 50:39Speaker 31

  Lead for life, for money, for love, knowledge, has marked an upward surge of mankind.

• 50:46Speaker 30

  All of these things are the result of a deregulated economy, which unleashes the capacity to make profit on things that have no oversight and no regulation, and pull people in with the promise, "You too can be a homeowner. You too can be a middle-class person by getting this education. You too can be a millionaire. You too can climb your way up to the top." Except there is no top. You never get off this wheel.

• 51:27Speaker 30

  I think that, you know, it's a Hobbesian world in some ways. Hobbes described us as creatures who would only be, as he put it, "diffident or untrusting and competitive and anxious, and finally murderous, if we didn't have something that secured and held us in common." And one could say that what neoliberalism has done is taken away that thing that secures and holds us in common. It doesn't believe society exists, so there's no social body, so it's just ourselves. So what are we? We're little Hobbesian creatures, diffident, anxious, competitive, and in the end, a little murderous.

• 52:19Rund Abdelfatah?

  That's it for this week's show. I'm Randa Abdel Fattah.

• 52:22Speaker 07

  I'm Ramtin Arablouei, and you've been listening to Throughline from NPR.

• 52:26Rund Abdelfatah?

  This episode was produced by me.

• 52:28Speaker 07

  And me, and. Jamie York. Lawrence Wu.

• 52:31Rund Abdelfatah?

  Lane Kaplan-Levinson. Julie Kane.

• 52:33Speaker 07

  Victor Ibeiz. Darius Rafiyan.

• 52:36Rund Abdelfatah?

  Yolanda Sangwe. Fact checking for this episode was done by Kevin Vogel, and a special thanks to Pablo Luna and Lorenz Georgi for their voiceover work.

• 52:45Speaker 07

  Thanks also to Anya Grunman, Tamar Charney, and Julia Carney.

• 52:50Rund Abdelfatah?

  Our music was composed by Ramtin and his band Drop Electric, which includes.

• 52:54Speaker 07

  Naveed Marvi. Cho Fujiwara.

• 52:57Rund Abdelfatah?

  Anya Mizani.

• 52:59Speaker 07

  And finally, if you have an idea or like something you heard on the show, please write us at [email protected].

• 53:06Rund Abdelfatah?

  Thanks for listening.

• 53:10Speaker 00

  Stay tuned for the following announcements and messages from our sponsors.