The reforms of the 70s and 80s were strongly inspired by libertarian principles but largely failed. How do libertarians reflect on this?
The ‘market-based reforms’ and supply-side economics of the late 70s and 80s were directly inspired by thinkers like Friedman and Hayek. Reagan and Thatcher were even advised by Friedman himself. However, suffice to say that the result of Reaganomics and similar dogmas were never anything like the true free market society that, especially Hayek, envisioned.
Worse still, almost all of the promises of the reforms failed. Economic growth significantly fell in most of the Western world and, on average, world wide as well. Economic crises became much more prevalent: we saw 139 crises between 1973 and 1997 but only 38 between 1945-1971. Wages stagnated, families only maintained some wealth because women entered the work force. Leaders like Reagan hammered on keeping deficits under control, went for austerity on public services but proceeded to massively increasing defense spending, resulting in a much higher national debt. Thatcher also never really reduced public spending. Small government never came to be. Privatization is a subject on its own. Many public services did not become more affordable and efficient but pretty much the opposite. To this day we see a typical blurring between big capital and government, where crony corporatist relationships between the two result in even more government spending, money printing, high prices and poor services. Cronyism is probably a good description for this entire saga, which became beyond obvious after 2008. The entire thing crashed and pretty much has been on the government lifeline since. Those who were responsible were rewarded, the public got the bill.
Here we have arrived in the world we live in today. A world that, seems to be shaped much more by the reforms of the late 70s than postwar consensus before that. Of course, things did not get worse for everyone. The 0.1% richest became virtual oligarchs and the top 10% did moderately better. The rest is doing worse, relatively speaking. Trickle down never happened and the economy typically favors not dynamism but speculative capital accumulation, rent-seeking and other counter-productive activities, especially after 2008 and 2020.
How do we reflect on all this? How can you ever trust a fiscally conservative mainstream politician again?
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