Podcast Summary: Pitchfork Economics with Nick Hanauer

Back to Basics Series: What the hell are they talking about? Econ terms explained! (with Nick and Goldy)

Date: July 8, 2025
Host: Civic Ventures
Guests/Speakers: Nick Hanauer (“B”), David Goldstein/Goldy (“A”)

Episode Overview

In this special “Back to Basics” episode, Nick Hanauer and Goldy revisit the core economic terms and concepts frequently used on Pitchfork Economics. Aimed at demystifying jargon for listeners, the episode provides clear, practical definitions of foundational concepts like neoclassical economics, neoliberalism, trickle-down economics, heterodoxy, monopsony, and stock buybacks. Hanauer and Goldy infuse their explanations with humor and critique, challenging the orthodoxies that have shaped American economic policy for decades.

Key Discussion Points & Insights

1. Why Define Economic Terms?

• The hosts recognize that economic jargon can alienate listeners.
• “If you want to discuss with me, define your terms.” (Nick quoting Bertrand Russell, 01:00)

2. Neoclassical Economics

• Described as the “orthodox” school of economics, dominant since the mid-1900s.
• Core assumptions:
  • Humans are “rational self maximizers”—perfectly selfish and rational.
  • Value equals price: What you’re paid is what you’re worth.
  • Markets are in equilibrium, meaning gains for some require losses for others (Pareto optimality).
• Implication: Ideas like “raising wages kills jobs” and “tax cuts for the rich create growth” stem from neoclassical thought, despite lacking real-world evidence.
• Goldy: “So neoclassical economics, this is what you are taught in Econ 101.” (04:12)
• Hanauer: “We have drawn a bunch of conclusions from neoclassical economics… which are just objectively false.” (03:58)

3. Neoliberalism

• A political and economic ideology built atop neoclassical economics, developed as a response to the threat of communism/statism (1930s–40s).
• Core beliefs:
  • The only legitimate form of freedom is “freedom from constraint.”
  • Free markets and competition are the only valid organizing principles.
  • Capital (especially concentrated capital) is always the source of growth.
  • Corporations exist solely to maximize shareholder value.
• Neoliberalism has dominated U.S. politics and economics for the past 40 years.
• Hanauer: “It’s what most people accept, like gravity… there’s nothing you can do about it.” (06:50)
• Goldy: “If it means that I make $7.25 an hour and you make a billion… There’s nothing we can do about it because it’s a natural law.” (07:00)
• Hanauer: “And all of that’s bullshit.” (07:10)

4. Trickle-Down Economics

• Not a formal school, but a “set of memes and political rationalizations” used to justify policies that disproportionately advantage the wealthy.
• Key claims:
  • “Tax cuts for rich people create growth.”
  • “Deregulation for powerful people creates growth.”
  • “Raising wages kills jobs.”
• Timeline: Has shaped economic policy since Reagan’s presidency (1980s).
• Hanauer: “Again, all of which is bullshit.” (08:12)

5. Heterodox Economics (“Heterodoxy”)

• An umbrella term for non-orthodox, non-neoclassical economic thinking.
• Asserts that:
  • Humans are reciprocal and use heuristics, not always rational.
  • Value is about solutions and welfare, not just price.
  • Growth comes from the “evolution of fitness” rather than just production factors.
  • Economies are ecologies, not equilibrium systems.
• Draws insights from physics, biology, evolutionary theory, psychology, sociology, anthropology, information theory, and network theory.
• Goldy: “It is actually a synthesis of the latest science in a broad number of disciplines.” (09:13)

6. Monopsony

• Definition: A market where there’s a dominant buyer (as opposed to monopoly—a dominant seller).
• Example: Chicken farmers often have only one company (e.g., Tyson or Purdue) to sell to, dictating all terms and prices.
• Hanauer: “All of the value of that supply chain has been sucked out… aggregated into the earnings, bonuses and stock price of these big companies.” (11:12)
• Goldy: “The next time you get your chicken nuggets on the dollar menu, remember it’s not just the chickens who were suffering, it’s the chicken farmers.” (11:32)

7. Stock Buybacks

• When a public company uses its cash to buy its own shares, reducing the number of shares outstanding.
• Results in:
  • Higher share price (fewer shares, buying pressure).
  • Higher earnings per share (EPS), prized by Wall Street.
• Hanauer: “This is a way to make the stock price of a company go up without the pesky burden of having to make better products and services.” (12:33)
• Critiqued as a “pernicious practice”—currently about $1 trillion/year, or 5% of GDP.
• Hanauer: “A trillion dollars that does nothing in the economy but make a few rich people richer is a remarkable source of money for all those things [like education, health care, climate].” (13:10)

Notable Quotes & Memorable Moments

• Nick Hanauer: “Defining our damn terms.” (13:40)
• Goldy (on neoclassical economics): “If you pay me $7.20, that is what you are worth. That’s all I’m worth. And then when we pass a $15 minimum, somehow magically you’re 15.” (02:18)
• Hanauer (on stock buybacks): “You don’t even actually be good at your job.” (12:44)
• Goldy: “A cabal of guys… And it legitimately, and in a well meaning way, in response to communism and authoritarianism around the world.” (on the origins of neoliberalism, 04:56)

Timestamps for Important Segments

• 00:59 – 01:09 — Importance of defining economic terms.
• 01:09 – 04:18 — Neoclassical Economics Explained.
• 04:29 – 07:42 — Neoliberalism and its distinction from neoclassical economics.
• 07:38 – 08:15 — Trickle-Down Economics defined.
• 08:27 – 09:47 — Heterodox economics and interdisciplinary thinking.
• 09:50 – 11:40 — Monopsony: definition and examples.
• 11:48 – 13:35 — Stock Buybacks: mechanics and critique.

Conclusion

This episode provides a much-needed glossary for both new and long-time listeners, reinforcing Hanauer and Goldy’s accessible yet incisive approach to economic critique. They break down dense concepts, challenge dominant orthodoxies, and invite listeners to rethink the fundamental stories that shape our economy.

Listener Tip: If you want further clarification on other economic terms, the hosts invite emails to: pitch@pitchforkeconomics.com.