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Pitchfork Economics with Nick Hanauer
The Quiet Coup: Neoliberalism and the Looting of America (with Mehrsa Baradaran)
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- [00:02]
Nick Hanauer
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
- [00:11]
Goldie
The last five decades of trickle down economics haven't worked. But what's the alternative?
- [00:16]
Nick Hanauer
Middle out economics is the answer, because.
- [00:19]
Goldie
The middle class is the source of growth, not its consequence.
- [00:23]
Nick Hanauer
That's right.
- [00:29]
Mehrsa Bharadaran
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
- [00:42]
Goldie
We're recording this podcast in a year in which a very loud coup has been going on before our very eyes as the Trump administration and his cronies have been really quite publicly dismantling democracy, all of our democratic institutions and norms. But it turns out this didn't happen in a vacuum. There's been a quiet coup going on for at least the past 50 years, according to our guest.
- [01:14]
Nick Hanauer
Yes, it's true. And today we're talking with Mirsa Baradaran, who's a professor of law at UC Irvine and one of the country's leading experts on banking inequality, about her new book, the Quiet Neoliberalism and the Looting of America. You know what's super interesting about her perspective, which is somewhat different from ours, although highly aligned.
- [01:36]
Goldie
Yeah, very aligned.
- [01:38]
Nick Hanauer
Aligned, but just a different flavor is what she focuses on is less the economics of neoliberalism and more the way in which it has influenced our legal and institutional structures, which is equally valid and important. Right. And you know how corporate power quietly captures laws and has hollowed out democracy. I think that's just so interesting. It's something that you and I think know a lot less about than the economics. So it should be very interesting to hear from her about her perspectives on all this.
- [02:20]
Mehrsa Bharadaran
My name is Mehrsa Bharadaran and I'm a professor at UC Irvine School of Law. And I've written the Quiet Coup, which is the latest book. And previous to that, the Color of Money, and then previous to that, how the Other Half Banks. And I have another book coming up that I'm in the process of about the gold standard and war, how money and war have been connected from the very beginning in Greece. So that's in progress.
- [02:45]
Nick Hanauer
Fantastic. Mirsa, thanks so much for being with us.
- [02:49]
Mehrsa Bharadaran
Thank you for having me. One of my favorite podcasts, like the.
- [02:52]
Nick Hanauer
Title of your book suggests, you argue that neoliberalism was just an economic idea, but a quiet couple that reshaped our laws and institutions. So just, you know, just if you could describe for our listeners what your basic thesis is.
- [03:08]
Mehrsa Bharadaran
One thing I want to say as a sort of Setting the groundwork is ideology is a little bit different than like dogma or belief systems. Ideology is a system that you live in and it takes some time actually for you to understand that it's an ideology. So for example, you know, we can look back at the Middle Ages and look at all the ideologies that they had, but they at the time were like, no, this is just like the way the world works. I think neoliberalism is very similar. I think we're at the end of it, it's imploding, it's done. But we don't quite understand that we've been living in this very deep seated ideology for the last, I would say 50 or so years. And it does come out as an economic idea, but it's more like a religious idea. It is that the market is this thing out there that cannot be perturbed, that must be led, do its thing and if you, if you touch it, it'll explode. But you have to like maneuver it through Federal Reserve, you know, tinkering and all of this stuff. So, so it really is like a God that was created. It was heresy to, you know, socialism or anything like that to sort of tinker with it. So, so yes, it's an economic idea, but really it was, as I say.
- [04:18]
Nick Hanauer
In the book, it's what our, our friend Yuval Harari calls our inner subjective reality. Yes, it is the stack of ideas that holds our society apart. It's the air we breathe, the water we swim in. And it is completely invisible to most.
- [04:33]
Goldie
People, the stories we tell.
- [04:35]
Nick Hanauer
It is the matrix, literally.
- [04:38]
Mehrsa Bharadaran
It is literally the matrix, literally the matrix. And it's everywhere, it's pervasive. It's in our family structure, it's in our relationship structure, it's in the way we think about ourselves in the world. That's how ideology works. And it's actually I draw a little graph in my class when I teach a neoliberalism classes. If you start with Greece and slavery and war and it's very blunt instruments of tyranny, but the more advanced you get in society, the more the tyranny and the oppression gets very trickier. It gets and it's nuanced and it's deep. It's almost like we're self oppressing ourselves through these ideas and it's now just embedded into the way that we conceive of the world, the way that we value our own selves. So neoliberalism is the latest iteration of this thing that has been around. I would take it back I mean, it' know where it comes from, but definitely the second we enslaved other human beings and created a dogma about why that was okay. You could take it to Great Britain, you could take it to Greece, you could take it to any empire where money and war.
- [05:43]
Nick Hanauer
Sumer.
- [05:44]
Mehrsa Bharadaran
Yeah, right, right.
- [05:46]
Nick Hanauer
Maybe the law of Hammurabi.
- [05:50]
Mehrsa Bharadaran
And then it gets more. But it gets more and more developed. It's the same thing. It's the same thing.
- [05:54]
Nick Hanauer
We're rich, you're poor, and we need.
- [05:56]
Mehrsa Bharadaran
To keep it going. There's a reason why. And it says, either God says it or science says it. It's Darwin, it's the creator, it's whatever. And now it's the market. It is the laws of supply and demand that only the macroeconomists at Chicago understand. And if you don't agree with them, then you don't understand economics.
- [06:15]
Nick Hanauer
That's right. You're violating a law of nature. Yes, absolutely. I know we're getting a little bit off track here, but it's so fun to hear you talk about this because we, you know, because as Goldie and I and our colleague have interrogated this over the last decade and a half or whatever it is, it's amazing because the more you think about it, the more you see it, you know, and it's visible to me, it's like waking up.
- [06:41]
Mehrsa Bharadaran
It's the red pillar Matrix.
- [06:43]
Nick Hanauer
It's everywhere.
- [06:44]
Goldie
Right?
- [06:45]
Nick Hanauer
All these assumptions, all these ways we have of describing the world, our place in it, who gets what and why, all of it. It is just, it's fascinating and I agree with you emphatically that that neoliberalism like Voldemort and evil will never die. Because the yearning of powerful elites to organize societies in ways which benefit them and prevent other people from taking their place is as old as history and it will never disappear.
- [07:16]
Goldie
Right.
- [07:17]
Mehrsa Bharadaran
Well, let me, let me. So I start, maybe not this book, but I think I start this book with the James Baldwin quote about time rends all doctrines and makes them, you know, a lie. So there is a way, if you follow ideologies through time, they do have to shift because people do resist. So they change forms like Voldemort. They change Voldemort, yes.
- [07:43]
Nick Hanauer
But they never go away. Right?
- [07:46]
Mehrsa Bharadaran
They haven't yet.
- [07:47]
Nick Hanauer
Okay, okay. We can hope for that wonderful Star Trek future.
- [07:52]
Goldie
They evolve and adapt.
- [07:53]
Mehrsa Bharadaran
They evolve and adapt. Just as we evolve resistance. Resistance evolves and then the ideology evolves with it. So yes, you have to be constant. And this is why this is so important. Like the Stuff, the work that you're doing, the work that we're doing is to constantly be calling out, this is the new bullshit. This is the new bullshit. This is the new bullshit. Yeah. And the bullshit gets more and more nuanced and more harder and harder to extract because it becomes deeper and deeper entrenched into everything. And that's why neoliberalism is so difficult to pick apart.
- [08:25]
Goldie
It's also, as you talk about in the book, it's. This is a really difficult and complicated story to tell, this critique of neoliberalism. Whereas neoliberalism itself is a very simple story.
- [08:39]
Mehrsa Bharadaran
Yes, right. So what neoliberalism says it is and what neoliberalism actually does. Right. So when, when I start the book, you know, you're like, oh, here's what the neoliberals say they're doing. But when you actually track it, I mean, as you see, I mean, the book took me a long time to put together because I wanted to follow everything that neoliberal did through every branch. So this is what it did in legislature, this is what it did in the agencies. And the agency bit is the biggest bit, I would say. And then there's the courts. Let me just lay that out. There's the courts, there's agencies, there's Congress. And then it's not just this ideology that goes top down. It's the way that neoliberalism gets into the very fulcrum of the scales of justice. Right. So when you go to court and you're arguing your case, a judge you think is looking at the facts and trying to get at justice. But what neoliberalism does through training of judges, through the ideology of Economics 101 and Law and economics and federalist society, is to say to a judge that the way that you're going to measure the scales of justice is toward a cost benefit analysis, or what is the.
- [09:49]
Nick Hanauer
Most efficient economic efficiency.
- [09:52]
Mehrsa Bharadaran
So Posner says efficiency is a proxy for justice. Justice is too hard and messy. It is inefficient, says Richard Posner, to go at justice because there's just too much. So you must go at efficiency. So all of a sudden you have efficiency and a cost benefit. And not just efficiency, whatever you think it is. Efficiency, the way that Pareto and capital efficiency.
- [10:15]
Nick Hanauer
Capital efficiency is what they mean.
- [10:18]
Mehrsa Bharadaran
And Pareto efficiency meaning that, you know, like across the board, if the corporation's gaining a million dollars and everyone else is only losing $20,000, like, but it's their livelihood, it's their insurance, it's Their farm. But the, but the insurance company is gaining a million. That's Pareto efficient.
- [10:34]
Nick Hanauer
Yeah.
- [10:35]
Mehrsa Bharadaran
Because it's a net positive across all people. That's, that's the efficiency that then gets lodged into every agency decision on environmental, every agency decision on banking, everything. And so now you've got embedded into the very scales of justice a market logic in the same way that like the witch trials would bring a woman to be like, well, if she floats, she's a witch.
- [10:59]
Nick Hanauer
She's a witch if she thinks she's fine. Right.
- [11:03]
Mehrsa Bharadaran
Like it's, it's that kind of justice. Right? Yeah, yeah. It's that deep. The ideology. It's like you can't get out of it. You're in their playing field. And so to argue against it is to have to actually deprogram or to. And a lot of leftists end up being stuck and having to argue for environmental justice in the frame analysis in that frame. Okay, well, if you extend, you can't win. And that's, that's the thing is like once they've had the arena and once they set the rules, you can't win on their terms. Right?
- [11:32]
Nick Hanauer
Yeah. One of the things that's driven us crazy craziest is that any, any policy which directly benefits the majority of citizens has to affirmatively prove that it will do no harm.
- [11:46]
Mehrsa Bharadaran
Yes. But.
- [11:48]
Nick Hanauer
Happens to rich people.
- [11:50]
Mehrsa Bharadaran
It's not. Right. As though that's not the basis of democracy, that it should benefit the majority of people. It is actually stacked now. And it's very clear as you look. I mean, the neoliberals, I mean, it's really astounding when you actually go and read, you know, Friedman and Stiglitz, I mean, Stigler, Stigler and Stigler, sorry, Stigler and Becker and Becker and Buchanan.
- [12:15]
Nick Hanauer
Buchanan.
- [12:17]
Mehrsa Bharadaran
They're so, I mean, first of all, they're all just out and out racist. Like, it's like, you know, the way that they're just like, you know, black people, I mean, inefficient market players. I mean, so it's so obvious what their motive is. It's in the 50s. We're talking about integration, we're talking about expanding democracy.
- [12:37]
Goldie
Right.
- [12:37]
Mehrsa Bharadaran
And so the second democracy tries to expand to bring in a new group of people, they're like, forget democracy. Democracy is inefficient. Democracy is anti majoritarian. This is Buchanan. Any taxation is theft of the minority. And the real minority, the real oppressed, per Lewis Powell, per Buchanan, per Friedman, is the rich people. That's the real victims of democracy. And so they say it very clearly. It's very clear what they're onto. And so then to stretch it out and then you have this ignorance of like, no, well, this is about market efficiency. Well, they didn't say that. They said it's about a minority losing out to majorities. So they're very clear that this is anti democracy. And that's, if there's any giveaway here, it's like this is the opposite of democracy. Neoliberalism cloaks itself in freedom. But what they're saying is democracy is bad for the elites and the elites, what's good for the elites is good for everybody. So we should go for what's efficient for elites, for everyone. And it'll trickle down to you. Don't worry about it.
- [13:41]
Goldie
Yeah, yeah. It's interesting because in the book you point out it's not simply that this is in defense of the white majority. You talk about in the South. I think it was William F. Buckley who basically out and out advocated for white minority rule in defense of civilization.
- [14:01]
Mehrsa Bharadaran
Yes. And I say, I think about Buckley. He's one of the neoliberals that starts out in 1960 as an out and out racist segregation forever. He goes, apartheid is good. You know, Jim Crow is good. To, by the end of the 60s is a full on neoliberal black capitalism. And capitalism is good. So you see it in, if you follow each individual, they start out saying in the 1960s, segregation, what they believe, what they believe. And then they find a new way of saying it, which is, you know, Lee Atwater gave away the playbook. He's like, oh, you're saying things like states rights. You're saying things like economic efficiency. But what you really mean is segregation forever. Right? That's, that's the whole thing.
- [14:44]
Goldie
Then we see this today with, with the Trump administration and their anti DEI stuff where like, you can't, you can't use race as a, as a measure for admissions to college. But now they're saying you can't use socioeconomic measures if that ends up benefiting black people.
- [15:06]
Mehrsa Bharadaran
Yes, yes. And race. So race and neoliberalism, this is kind of the point of my book is to really bring in the racial story into neoliberalism. It's two things. It's. One is the civil rights movement really is the impetus for this neoliberal backlash. And also that race becomes, as it always is, not about like the hatred in our hearts, but a really effective political weapon. How do you take away people's rights? How do you Break apart majorities is you give them racism. Right. So Nixon does exactly what the Reconstruction. The way that Reconstruction fails is that the Democrats in the south, you know, instead of having all the sharecroppers join up against the cotton oligarchy, you've got white sharecroppers and black sharecroppers. The white Democrats in the south give white men the Klan and white supremacy so that they will join with them against their natural economic allies. Sure, right. Same thing that Nixon does, same thing that Trump is doing. As soon as the inequality gets too large and too unsustainable, race becomes the most effective political weapon. And you can do trans. You can do any. Any of the hot button issues. It's like, why were the billionaires funding Charlie Kirk to go and do these wedge issues like, who's funding that guy? I mean, look at the money. What do they want? They just want division. They don't care what it is, whether it's trans or race or whatever. And so this becomes a strike against class solidarity, essentially.
- [16:34]
Goldie
And one of the great things about your book for me is that it clarifies an idea. A lot of people have talked about the Trump being post neoliberal, basically, because he does tariffs, and that's not neoliberal, but in fact, he's totally neoliberal. It's just an incoherent form of neoliberalism.
- [16:53]
Mehrsa Bharadaran
I would say it's neoliberalism in the 1960s, the way they started talking neoliberalism when they were still talking apartheid is good and the market should rule. That's Trump again. Trump just took away the nuances, like, why are we. Why. Why are we pussyfooting around the actual fact of this? Right? And so Trump. Trump lays it out. Exact wood stickler. You know, who. Who would say, like, before he was. He was saying things like inefficiency or whatever, he was writing op ed saying the black people are inferior to white people. And then he becomes this very, you know, macroeconomic guy. Right? But yes, it's the same. Same message. And Trump is. His policies are very much aligned with what, even Hayek. And then they were very strong state power. They were, you know, they. Not tariffs necessarily at the time, because they wanted capital flows. They wanted capital to be above democracy. But that cat is already out of the bag. Right? The point of the 60s was, in the post Bretton woods era, is you have all of these nations gaining statehood all at once. You have five European nations controlling every global south country, every resource, and all of a sudden, empire goes away. That Doctrine dies because the Nazis put it to full effect. And what do you have? You've got every nation has a vote. You can't have that kind of democracy on the world stage and still have corporations looting the Middle east for oil, looting Chile for copper, looting South Africa for diamonds and gold. So you need a new ideology. And so capital has to become higher than democracy. And that's the pivot. That's what happens in the 70s. And so now you've got just a capital world. The nation state's been defunct, I think, for a while. I think capital's been running the world economy for a long time. And that's neoliberalism. So Trump is a very interesting neoliberal because he's the original. He wants it back to where it was, where state power is. And I think that's what we'll see. We'll see whether any state power can actually defeat the power of capital. I think that's the more interesting thing going forward.
- [18:55]
Nick Hanauer
Yeah, interesting. Mersa, I am personally acquainted with what many of the world's most.
- [19:04]
Goldie
Tried to say it politely.
- [19:05]
Nick Hanauer
Yeah, yeah. I know a lot of these people. Yeah, yeah, yeah. I know a lot of these people personally. Yeah. And I think I can say pretty confidently that they are not racists, they're sociopaths. They don't care about anybody.
- [19:24]
Mehrsa Bharadaran
Totally.
- [19:25]
Nick Hanauer
They are equal opportunity exploiters.
- [19:28]
Mehrsa Bharadaran
Yes.
- [19:28]
Nick Hanauer
Right.
- [19:29]
Mehrsa Bharadaran
Yes.
- [19:29]
Nick Hanauer
They'll steal from poor white people just as happily as poor black people.
- [19:33]
Goldie
Let's be fair, Nick. I mean, Elon Musk, it's possible to be both a sociopath and a racist.
- [19:39]
Mehrsa Bharadaran
Yeah. Elon Musk is probably both.
- [19:42]
Nick Hanauer
Yeah. Jeff Bezos is definitely not a racist.
- [19:44]
Mehrsa Bharadaran
Sure, sure.
- [19:46]
Nick Hanauer
But he definitely feels fine exploiting anybody he can possibly exploit.
- [19:51]
Mehrsa Bharadaran
Yes.
- [19:52]
Nick Hanauer
This is a person who absolutely believes that if it's good for Jeff Bezos, it's good for the world.
- [19:56]
Mehrsa Bharadaran
Yeah, yeah.
- [19:57]
Nick Hanauer
Full stop. Right. So I don't doubt that a lot of the worst actors in academia were motivated by racism originally, but I think we've gone and we've transcended that somehow.
- [20:12]
Mehrsa Bharadaran
Yeah, yeah.
- [20:14]
Nick Hanauer
Where capital, again, capital looks for the easiest place. Now, sometimes brown people are easier to exploit than white people.
- [20:23]
Mehrsa Bharadaran
Yeah, right. Yeah. I don't think race is motivating it at all. I think race is one a useful political weapon for. It's like just red meat for certain people. And it just constantly works in that way. But in the book, I do, you know, the first, the first third of the book is why neoliberalism? Why that time? Why does this ideology become the successor ideology to Empire. That's the first part of the book. The second part of the book is the how. How it infiltrates into the law. And then the third part of book is what happens when you've unleashed capital. And what happens is capital is its own algorithm. So there's this story about AI, this like nightmare story about the paperclips. I don't know if you've heard of this. Like, if you program an AI to create just paperclips, like, you know, make it the most efficient way possible, and a sudden we're all paperclips. Our bodies are. The society is just. You don't give it a stopping point and everything turns into paperclips, right? That's. That's how. That's how these AI algorithms work. And that's like a dystopian future. But we've been in that since the 1980s. Once capital is unleashed above the nation state, above anything else that is production or productivity or GDP or anything like that, capital must grow at least at 6%. But we're in a world where capital must grow at 20%. How does capital grow in private equity firms and hedge funds at 20% year on year? What is at the other end? It's debt, it's exploitation. So capital has now just become a force. If there is a matrix, if there is an AI algorithm, we're under, it's capital itself. And so all these guys, Bezos and Elon, it's hard to imagine a world where there aren't individual villains. And that's why this idea is so hard. It's hard to understand ideologies, the way they work, abstract ideas and concepts. But we live in that world. We live in a world of abstractions. And abstractions, like capital are the greatest forces motivating human behavior. And they run on their own. They have their own gravity. So yeah, yes, it's their. And we're. We're part of it. We're the paperclips in capital's machine. And so at the end of the book, I just call the markets like the big dumb machine. And it's cannibalizing us. Like our 401ks are up in this massive pool of capital that is just expanding and expanding at like, it's an unstoppable rate at this point. It's just a metastatic. And that's what it is. It's become metastatic because there's nothing supporting it anymore. And so it's just running on exploitation, debt and extraction. And that's the problem. And it's not even efficient anymore. It is, you know, the zeros and ones are growing faster on these balance sheets than they can ever be put to productive use than there is anything correlated in the real world to it. And that has to stop because that's absolutely unsustainable. It's absolutely sustainable.
- [23:17]
Nick Hanauer
So you opened your book with an example, the PG and E example. Just we've been talking in abstractions.
- [23:24]
Mehrsa Bharadaran
Yeah.
- [23:24]
Nick Hanauer
Maybe tell that story.
- [23:26]
Mehrsa Bharadaran
Yeah. So I mean this is, I was fascinated by like Marjorie Taylor Greene's rise and the rise of these conspiracy theorists. And you look at the thing that got her on the national stage is this Facebook post that she wrote in 20, I think 16 or 18, I can't remember the exact date, but it was after the paradise fires in California caused by PG&E had many charges of manslaughter. They are a utility that has a monopoly in California, but they're private shareholder owned company and so they owe to their shareholders absolute profits. But they're a monopoly. So they have no competition on the ground. And so they kept causing these fires by not updating their equipment. They had like hundred year old poles that they were not updating because it's less efficient to do that then it's expensive and they had better ROI on lobbying or whatever they were using their money for. So, so this poll falls down, causes this fire. And Marjorie Taylor Greene instead of saying, look at this PDE structure, she's like, oh, Jewish space lasers and it's the Rothschilds and all the Democrats together in this conspiracy. And that if you're someone looking at this and don't know all the facts and don't have all the time to research it, you're like, something smells fishy with what happened here. And also PGE went quickly through bankruptcy because you can do that to extinguish all of your liabilities just like the Sacklers did. Just like any company that can just, just pick their court in White Plains. I know those lawyers, I worked with them at Davis Polk. We were famous for this, right? You can just take a company into bankruptcy, just wash it of its liabilities and it comes out with the shares skyrocketing afterwards. So they did that with pg.
- [25:05]
Goldie
Thank God we can't do that with student debt, right?
- [25:08]
Mehrsa Bharadaran
Oh gosh, yeah, yeah, you would hate that.
- [25:10]
Goldie
Is non dischargeable.
- [25:11]
Mehrsa Bharadaran
Exactly, exactly, exactly, exactly. So you're saying this smells fishy. And she comes in and she says, says here I have these villains for you. Rather than it's a system. The villainry is in the system. It's these ideologies, it's these abstractions. And that's why it's so hard. But we have to, like, be humans that can think in abstractions. I mean, we live in an AI world, not just the AI that they're spouting, but we've been living in algorithmic demands. Like we are living in capital's world right now. We are capital's supply. We're capital's food. We've been capital's food. And capital is insatiable. There's no stopping point to capital. It will make paperclips. That's what it's programmed to do unless democracy checks it. And what neoliberalism did is prevent democracy from ever checking capital's absolute expansive growth. And now that it's metastatic, it's a cancer into democracy itself. Try to regulate the banks. I was the nominee for the Office of the Comptroller of the Currency in the Biden administration. The banks didn't want me to, and guess who they wanted? Nobody. We did not get a nominee for Office of the Comptroller of the Currency. The person that regulates banks, the person that says how they can make money and upon whom's backs they can do it. So that was my insight. This book came out after that and I put a little bit of it into the conclusion. But if we can't regulate the banks, we don't have a government, we don't have a democracy anymore. So that's why I got very, I'm very not, not optimistic about policy changes or political parties that can stop this thing. We really have to look at it as what it is, which is just an abstraction that we're all under. We're all under.
- [26:58]
Goldie
And to be clear, when you describe the market as an algorithm, it's an algorithm for inequality. That's not a metaphor. It is fact. Nick and I are working on a book and in it there's a chapter on how well can I use the word nonergotic?
- [27:22]
Nick Hanauer
Non ergotic.
- [27:23]
Goldie
Nonergotic systems work. There's a math to the market that, unregulated by a democracy, makes vast inequality inevitable. It's just this interaction between luck compounding and path dependence. And the inevitable outcome is vast inequality. And that's what we've been getting because we just let the market do it.
- [27:52]
Mehrsa Bharadaran
There's no other way. Yes, yes. I mean, Marx had it right in saying, once you've created this abstraction called capital, everything is going to be commodified. And what you've seen in the last 10 years. So if you look at the commodification cycle, right? So first in it's land, that's the original capital, what the first capitalism, how it proceeds is it commodifies land. Land becomes property, then human beings become property, then time, your time and labor. So this is industrial revolution. Your, your working day becomes a commodity. Now we're in your thoughts, your social circles. Capital is, is hungry and it needs more and more living things to stick into, like the wood chipper that creates profit and abstract profit on the other end. And so everything that we've put into the wood chipper, first the land itself, then human beings, then our time, now our minds, then our social circles, and now the AI future is our like therapy, our psyches, our subconscious, it's endlessly insatiable, like there's nothing it won't commodify.
- [29:02]
Goldie
And importantly, capital is not this objective thing that exists in the real world. It is entirely a legal construct.
- [29:13]
Mehrsa Bharadaran
It's a legal abstraction. We have created it and it has a life of its own. But that's why it's dangerous. You know the, the lily pond example, you know when you say like if a lily pad on a pond doubles every day and it's half the pond on the 49th day, what is it on the 50th day or something like that, I'm screwing it up. But it's like the whole pond, right? And, and it's hard for us to fathom that kind of growth because nothing in the natural world world grows, but capital does. Compound interest grows like that, right? And so we've created these abstract ideas that can grow beyond any human or natural limit. So capital can grow faster than anything on this natural planet can grow. We're so far beyond the natural cycles that we were supposed to be living in. I mean, I can add in here, part of capitalization, part of what we've done in abstraction is completely relegate indigenous wisdom. And this idea of living with the land, the, let's say feminine concept of the market as exchange and as gift giving and as community has been, that's like you don't understand markets if you're talking about bad stuff, right?
- [30:21]
Goldie
So yeah, we're always told, I'm always told, I just don't get the math. If I understood the math.
- [30:27]
Mehrsa Bharadaran
Yes, but it's about math that the market's about math. And I think you go back into like the Silk Road and the market was very much about trust and innovation and, and all of the things that Human beings create. So I'm not an anti market people, I'm. I'm from the Middle East. Like we are market people. Our societies are very exchange driven. But it's not capital, it is exchange, it is trust, it is innovation. There's definitely some like messiness and chaos to markets for sure. But a market is, is, you know, you need money to like, you know, measure how much rice for saffron, Right. But not money that grows indefinitely in an abstract way into the future. Right. So capital just introduces this new thing into humanity that has been ongoing and that has been sucking the lifeblood out of community and out of society for a long time. But it has reached absolute sort of metastatic rates at this point.
- [31:24]
Nick Hanauer
So what do we do? We're in violent agreement with most of your thesis with this caveat that markets do have a role in human societies. Markets have proved to be. Markets are not efficient. Markets are an evolutionary system for generating new solutions to human problems. They work better than anything else ever devised. And if they're well structured, they can be for the good. But given where we are, what do we do to reel all this in?
- [31:55]
Goldie
Because you make the rather, I think startling to some people, claim near the end of the book that we don't need to tear everything down.
- [32:03]
Mehrsa Bharadaran
Let me clarify. I am done asking the government for anything. I've been. I think the government, I think that is for people on the left, you know, especially in the socialist Marxist strain. It's about government power. And I don't think that that's the right way. That is especially in that sort of just left, right spectrum. I don't think that spectrum works. It's defunct. I think we're about us human beings versus capital. It's human beings versus this abstract idea. And there are ways to do it. It's actually, when you look at it, quite easy. It just takes new stories. It just takes us routing our money and putting it where it belongs and then getting ourselves out of this money system, getting ourselves from under it to above it. If capital is a legal concept, that is a bunch of human beings believe in. Money is just about belief. The monetary system is just what we believe, right? So it's all of these ideas that are controlling us. All we need is new ideas. And that sounds really easy, but it's tricky. The logistics aren't hard. Listen, create a little hole in the stock market where we stick our 401ks into that is one share, one vote. No dilutions, no preferred shares, just one stock, one vote vote corporation. The US Constitution was based on a corporate charter. We could do it again, just disentangle money from voting power. One share, one vote. We stick our 401k in because that's how the market gets us. My 401k is stuck into the war machine. When you look at what I'm invested in and I had to do this as a nominee, it's like Raytheon, Exxon, all this shit that I don't want to be a successful industry when I'm retired, okay? But I can't get out of it. So if we can get a vehicle to stick our 401ks in, get a couple billionaires to put money in and start actually investing in the things that we want. So what are the things that we want? I want the weapons manufacturers. I want Raytheon, I want Halliburton. Like get enough money, get the leverage and get the weapons out and then, and then we can start talking. I think it's really just a few industries that got into the law, that bent the law to their favor. And this is, this is where it gets actually easy. When you look at in the abstractions, it's oil and gas, it was tobacco and pharmaceuticals, but that, that's less powerful. But it's weapons, weapons control. It's the. What Eisenhower said when he was leaving office is still true. It's a military industrial complex. And at this point it's just money. And if it's just money, we could coordinate and buy it. And I think we can prove that it's way more profitable, more efficient, more life giving for all of us if we do not have a war economy. I think this is where my next work is. Money and war are so tied in together that they need each other. And war is the destructive engine that's crushing us. And it's tied in. You can't have the US dollar without the war machine. And I don't think that means that we have to give up on modernity. And I think that's the lie also that we have to give it up. That's what I'm saying. You don't have to tear it apart. We don't have to go back to like foraging. We have modern structure. We saw during COVID how much the world can change. We saw the supply chains, we saw how interconnected we are in a world. And so I think this is the pivot we're at as a humanity. We're either one world who breathes together, eats together, uses resources in an efficient way that feed and clothe and house all of us, because there are no scarcities. There are only scarcities of ideas. There's no natural scarcity. This was the promise of the 60s. We either do this as one globe or we nuke ourselves to death. And we're still at that cusp. We've been delayed 50 years. Can we do it? Or are we on the path to nuke ourselves to death? And I don't know. I don't know if we make it. My bet is that we do, but it's going to take some new ideas and new stories. And it really is about back into the spiritual. We were talking about how neoliberalism lives in us. I think writing this book was actually a deprogramming of myself. The way that we think in neoliberalism.
- [36:12]
Nick Hanauer
Our writing has been deprogramming.
- [36:14]
Mehrsa Bharadaran
You have to decolonize your mind. You have to depatriarchy de neoliberal yourself and get free of it. And then we can start talking.
- [36:24]
Goldie
Right, right. It's funny because I was just writing something where I talk about how hard it is even for us not to think and speak in terms of its metaphors.
- [36:36]
Mehrsa Bharadaran
Yes, exactly. Yes, yes. So new ideas, but it's not that new. We can go back. We had many societies. And this is also the lie of the neoliberals is like the idea of progress. We were all savages who killed each other until civilization became less violent. This is Steven Pinker. We're so much less violent now. Are you kidding me? Like, do you know anything about ancient societies? There were societies that lived without violence for thousands of years. You know, in this continent, on that continent, you know, we have records of them. We can do it. We've done it as a humanity. And we must not be blinded by these abstractions that have us thinking that there's no alternative. I mean, this is Margaret Thatcher. There's no alternative. There are. There are many alternatives and we've done them.
- [37:22]
Nick Hanauer
Interesting couple of final questions. If you could wave your magic wand, I'd love for you to point to a policy rather than a vibe.
- [37:30]
Mehrsa Bharadaran
Yeah, yeah, right.
- [37:32]
Nick Hanauer
Like the vibe I get. But it's not that useful.
- [37:34]
Mehrsa Bharadaran
So literally, I mean, like I said. Okay, again, I'm not asking Congress for any. Anything. I can't. We can't get there. I've tried. We've tried. I mean, think about. Think about the money involved, but we create a little shareholder corporation thing, put it on the stock market super easy. Ask people to put their money the way that crypto does it. Right? But. But Actually one share, one vote, whatever. What like the structure is easy. And then we, we go after industries that are blocking. So like I said, weapons. We invest in, in poverty reduction, we invest in inner cities. We buy up the lower east side of Manhattan and create from the ground up profits right for that corporation. We create what we want to see in the world. We create the world that we want to see through money. If money controls it from the top, why not use money to control it from the bottom? The eventual goal is to get out of this money system. This money system is, all of those myths about war and hierarchy are embedded in this money system. So I think this money system has, I think it's going to break one way or another this, this dollar supremacy, this empire kind of money system. And so I'm saying let's break it from the inside and give options for coming out of it. I don't see a way out without the whole it's got to be a holistic change, but there's many ways to do it.
- [38:55]
Goldie
So you're suggesting public equity firms instead of private equity?
- [39:01]
Mehrsa Bharadaran
Yes, public, but. Yes, but not through government, through actual public, through human to human. Do we all agree in this, with this structure? How much am I willing to invest of my own money into this world? And you know, looking at crypto and I'm obviously a very much this is bad, bad, bad because it's rooted in neoliberalism itself. But looking at the buy in of something like GameStop that had a $50 billion, how many people would be willing to invest into an alternative market than this one? A lot more people than you'd assume. People are sick of it. We just don't have a way out because we've been told that there's no way out. Give people a new story, give people somewhere to put their money and their time and their talents and they would take it. Something that would feed them, something that would be in the community. So I think it's both. It's. One is getting the abstractions right, getting the corporate structures right. And then there's the other is building community where we sit, actually figuring out to go back to those small scale food and housing and all of that stuff and making sure that everyone, everyone gets what they need.
- [40:09]
Nick Hanauer
And one final question, why do you do this work?
- [40:12]
Mehrsa Bharadaran
I was born under bombs. I was born in 1978 in Iran and it was the start of the revolution, an eight year war between Iran and Iraq. And my research, I didn't realize this, but all my research was headed to trying to figure out why what happened, happened. And the answer is that that was. Was a war started for money. There was no reason for Iran and Iraq to be fighting for eight years with millions of dead, with fascism in both countries. I was born with men with guns, bodies hanging in the street. My mom was in prison for three years. And that was neoliberalism. Neoliberalism fed the Shah billions of dollars because the neoliberals wanted Iran's oil. And then the revolution happened because Iranians didn't want to be oppressed. And then the right wing got fed by Reagan. This time, weapons on one side, weapons on the other side. Why? Because Halliburton needed to. Needed profits. And there was no natural wars going on. And so they had to manufacture a war. And so since 1978, there's been manufactured wars for money. And so I've been, unbeknownst to me, this was subconscious until recently, following the money to figure out why what happened to me happened to me. And I think we can. You can take it on down. And all of us have been harmed by these ideologies, individually, psychically, spiritually, emotionally.
- [41:25]
Nick Hanauer
That's fascinating. Well, thank you so much for being with us. This has been a terrific.
- [41:29]
Mehrsa Bharadaran
Thank you so much for having me.
- [41:31]
Nick Hanauer
Yeah, I'm really excited on your endeavors. We can't wait to have you back for your next book.
- [41:35]
Goldie
Yeah.
- [41:35]
Mehrsa Bharadaran
And thank you for doing this. I really appreciate this whole podcast, everything that you're doing.
- [41:45]
Nick Hanauer
So what a fun conversation that was, Goldie. A little bit all over the place, as.
- [41:50]
Goldie
I love that, you know, that's the kind of conversations I love.
- [41:54]
Nick Hanauer
Exactly. Sorry, listeners. Must be annoying if you're a listener, but super fun for us. It's so fun sometimes to talk to somebody who has been on the same sort of personal journey that we've been on. You know, that conversation we had at the top about how neoliberalism, it just permeates everything. It is the air we breathe, the water we swim in, the stories we.
- [42:27]
Goldie
Tell ourselves to interpret the world and our place within it, the metaphors we.
- [42:32]
Nick Hanauer
Use everything, everything, everything, everything.
- [42:35]
Goldie
And, you know, in our introduction, Nick, you mentioned that she was aligned with us, but. But approach it a little differently. And the way I'd sum that up from our conversation is we have always thought about neoclassical economics, economic orthodoxy, as the foundation on which this neoliberal ideology is built. Yes, but I think what Marisa is telling us is that neoliberalism is the foundation, that ideology is the foundation. And. And explicitly, she said this neoclassical economics is just the skin it wears to justify itself.
- [43:18]
Nick Hanauer
Yes. You know what? And I'm sure that's true. Right. And neoliberalism in that sense is this perpetual, permanent desire on the part of elites in every society, the rich and the powerful, to. To maintain their power and wealth. Right?
- [43:40]
Goldie
That's right.
- [43:40]
Nick Hanauer
And to expand it.
- [43:41]
Goldie
And you can see it historically. Cause, you know, she mentioned some of the. Almost all of them, I think, Nobel Prize winners. Hayek, Friedman, Becker, Stiglitz, Buchanan.
- [43:54]
Nick Hanauer
Not Stiglitz. Not Stiglitz. Not our friend Joe Stiglitz.
- [43:57]
Goldie
Stigler. Stigler. I did the same mistake she did.
- [44:01]
Nick Hanauer
We apologize again, Joe.
- [44:03]
Goldie
Hey. Right, Stigler. Profound racists who then modified the way they talked about things so that they basically didn't sound as racist. They clothed their racism in math, in economics. Eventually.
- [44:21]
Nick Hanauer
But just to be clear, even if it wasn't racism, it was a form of elitism, right? You don't have to be a racist to be a shithead.
- [44:29]
Goldie
But they were all racist, okay? I mean, read their words. They were.
- [44:34]
Nick Hanauer
I'm not denying that. I'm just saying that the problem is bigger than racism.
- [44:37]
Goldie
Right. But my. But. But the point I was getting at.
- [44:40]
Nick Hanauer
There are neoliberals in Nigeria, and everybody's black. They're just as exploitive.
- [44:46]
Goldie
It's possible, right? It's possible to be neoliberal without being racist.
- [44:51]
Nick Hanauer
Yes.
- [44:52]
Goldie
But I think what's important, the point I was getting that is that if you look at the history of neoclassical economic economics, of its rise over the past 75 years to the dominant orthodoxy, its founders were the founders of neoliberalism. And if they weren't, they were deeply shaped by neoliberalism, that neoclassical economics, as it has evolved into this highly mathematized theoretical construction. There's a strong argument to say that it came. That neoliberalism predates it, and it came out of neoliberalism as an effort to justify the beliefs of neoliberalism. So it's that idea that she has, that it's neoliberalism as the foundation. Maybe she's right and we got it backwards. Maybe it doesn't matter, because in an evolutionary system, in a reflexive system, these things just influence each other.
- [45:57]
Nick Hanauer
Yes.
- [45:58]
Goldie
Again, there's other places, of course, where she's very aligned with us. The idea that it's about stories and that the way to fix this is to tell new stories. That is something we've been saying for a long time. It's just, again, you know, and she says it in the book. Their story is really similar.
- [46:17]
Nick Hanauer
Simple. Yeah.
- [46:18]
Goldie
Right. It's a very simple and compelling and easy to tell story.
- [46:22]
Nick Hanauer
Yeah.
- [46:23]
Goldie
And our side has not come up with an equally simple and compelling story because somehow we feel our people tend to feel constrained by facts and logic as opposed to the best stories are just assertions.
- [46:43]
Nick Hanauer
Yeah.
- [46:43]
Goldie
They are, after all, just stories.
- [46:45]
Nick Hanauer
Yep. Yep.
- [46:46]
Goldie
And it and it may sound cynical, but sometimes, you know, the truth and facts are not always the same things. And sometimes you don't need facts to back up the truth.
- [46:57]
Nick Hanauer
No, it's true.
- [46:59]
Goldie
And we just need to tell. We need to worry more about telling effective stories than ones that we can cite. You know, have academic citations to support the arguments we're making.
- [47:11]
Nick Hanauer
Making interesting conversation.
- [47:14]
Goldie
If you want to read more from Mersa, of course we will provide a link in the show notes to her book the Quiet Neoliberalism and the Looting of America. We encourage you to read it. You can buy it at your local independent bookstore. You can take it out of the library. And if you have to, if it's what's most convenient, you can of course purchase it from the that giant online monopolist.
- [47:48]
Nick Hanauer
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram and Threads. Pitchfork Economics Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly news newsletter, the Pitch, over on Substack. And for links to everything we just mentioned, plus transcripts and more, visit our website, pitchforkeconomics. Com. As always from our team at Civic Ventures, thanks for listening. See you next week.