Patrick Collison AMA on r/neoliberal
reddit.com>It reminds me in some ways of net neutrality: yes, fast lanes and slow lanes have real downsides. But there's vast capex required to build the infrastructure we need. How should that be paid for?
Defending credit card fees by criticizing net-neutrality. I guess at least he’s being interviewed in the right subreddit...
> These steep fees also fund (a) vast extension of consumer credit, (b) massive card distribution programs, and (c) the downsides of a generally frictionless payment method (occasional fraud losses), all of which together yields higher spending for merchants.
This is a bit disingenuous. He makes it sound like these fees are the primary income for card companies, but that's not the case. Interchange and merchant fees represent a minority of revenue for card companies[1] - about 26%. The bulk of actual revenue comes from cash advances, fees charged to the customer (both annual and penalty fees), interest on balances, and ancillary products like insurance.
Here's the rub: if the US regulated credit card fees like they do debit cards (via the Durbin amendment) Visa would still be profitable - they happily operate and makes money in countries where credit card fees are capped by law, like Australia. They wouldn't be as profitable, sure. Neither would Stripe.
[1]: https://www.fool.com/credit-cards/2017/04/13/this-is-how-cre...
> They wouldn't be as profitable, sure. Neither would Stripe.
It shouldn't even affect Stripe all that much. The CC fees are just a pass-through expense for them; their product is the infrastructure value-add, which AFAIK nobody is suggesting needs to be price-regulated.
One of the reasons the Federal Reserve was created was to eliminate rent-seeking by banks in check clearing. (The previous system was that banks would clear checks directly among each other, leading to abuses where banks would charge exorbitant fees to other banks.) I'd argue credit/debit cards are just as important today as checks were in 1913. A functioning economy requires a functioning payment system.
I had to read that several times and I still can't understand his argument. Perhaps the phrasing didn't come out as he intended.
He is defending allowing companies with significant capex to collect rents, with the justification that if the rents were not allowed then the capex would not be expended.
I'm not sure he's taking that strong a position? It's more like he's saying that if we lowered fees, there might be unwanted side effects, so something might need to be done about that.
Interesting to see individuals show pride in the “neoliberal” label, which is usually a stand-in for “complacent”.
It is very peculiar.
Whether it is an attempt to "reclaim" the word or not, that subreddit's usage of "neoliberal" bears little relation it's usage as defined in books such as David Harvey's 'A Brief History of Neoliberalism', where it is most commonly associated with privatization, financialisation, tax cuts, the retrenchment of social welfare and rapid growth in inequality.
Critically, the neoliberal state is not 'smaller', it just prefers deficit spending to tax and prefers to funnel money to private enterprises and the military-industrial complex rather than spend it on it's citizens.
In contrast, /r/neoliberal seems to use the word to mean some sort of libertarianism-lite?
You can be a center-right neoliberal, a center-left neoliberal, or something in between. The sub leans center-left, while traditionally neoliberals have been more center-right.
I think the reason is, for the first time in about forty years, neo-liberalism is really under threat. It used to be that neo-liberalism was so dominant as a political creed that it wasn't politics - it was reality. For better or worse, Trump on one side, and Bernie on the other, overturned that. So now, people identify as neo-liberals - while in the past, I imagine, there wouldn't be any point.
perhaps i misunderstand, but these things you list seem to be compatible with libertarianism (at least the right-libertarianism most commonly encountered in the US)
> privatization, financialisation, tax cuts, the retrenchment of social welfare
Neoliberals want to use the state as an enforcement vehicle for private interests, so neoliberalism leads to more corruption of the state while libertarianism seeks to abandon it.
Also, neoliberalism is much more crafty with propaganda, by necessity. Neoliberals use advertising and public relations to mask their alleged conflicting agendas.
For example, Trump is a neoliberal in libertarian clothing, while Clinton is a neoliberal in democrat clothing. They are both neoliberals. If they weren't, they would lack the cooperation from private interests needed to run.
Libertarians lack cooperation from the private sector because their public image is not "supportive, caring",
Democrats lack cooperation from the private sector because their actual political interests (like defending the working class) are in conflict with it.
So, neoliberalism makes the choice easy by combining the best of both worlds: dystopic support for corporate takeover AND the public image of loving kindness.
> Neoliberals want to use the state as an enforcement vehicle for private interests
Which is exactly true of libertarianism, which sees the only role of government as protecting it's model of property rights, which are precisely private interests.
> For example, Trump is a neoliberal in libertarian clothing,
Trump is neither a neoliberal norte does he dress in libertarian clothing. He's more a kleptocrat in authoritarian populist clothing, which is about as far from a neoliberal in libertarian clothing as you can get.
> while Clinton is a neoliberal in democrat clothing.
Neoliberalism is overtly the dominant ideology of the Democratic Party; Hillary Clinton is (and has for a long time been) a neoliberal in neoliberal clothing; though in the 2016 campaign she did try to preempt Sanders by adopting some progressive populist accessories.
I'd like to say, Trump is more of a nationalist/protectionist candidate, not neoliberal, and he definitely didn't run on neoliberalism, Clinton and the other Republicans (center/right and center/left) are two sides of a narrow coin, but the coin being a neoliberal coin.
Sanders ran as a populist/egalitarian candidate. I feel that neoliberalism will die, in fact the fact that Trump won, is the nail in the coffin, I lean towards Sanders philosophy more, personally, -- but with technological unemployment going to rise to more than 40% of existing jobs being gone by 2030, and income inequality only going to rise even more, there will eventually be a revolution of sorts.
If not a bloody one, then one of ideals, you can see it already in red states turning blue, or more people running for elections than normally would. In Utah for example more people are running as democrats than ever have before during an election cycle. Chances of winning are slim, for sure -- but more people are getting involved because they're starting to realize it's the only way to make a difference. Scientists are even jumping in, because for some reason the 'right' seems to hate science and education.
Parent from 2 up here. For the record I agree with both of the comments under me. All good points. I guess it’s not much help to call Trump a neoliberal. I’ll take that back.
That's not what it means here. The label was rehabilitated by Sam Bowman back in 2016:
https://medium.com/@s8mb/im-a-neoliberal-maybe-you-are-too-b...
Basically used here to describe a politics which is fond of market-based policies but supportive of redistribution when it is necessary for positive outcomes.
Tough statement. I doubt you can rehabilitate a such negative term in not even 2 years.
In some circles it was never a negative term to begin with. In other circles it will remain a negative term forever, regardless of what you do.
One interesting consequence of the Internet is that we're becoming very aware that for every label you could ascribe to yourself, there is some group out there who holds a deep, visceral hate for that label, so deep that they wish you would just cease to exist. I guess this was probably the case beforehand, but without instantaneous global communication, you generally weren't aware of the people who hated you. I remember that when I was growing up, terms like "American", "patriotic", "tolerant", and "generous" were unambiguously good, but now for each of those there is some group who considers them a dog-whistle for people they despise.
I don't talk about extremists.
The term itself was hardly known/in use to the general public before the crash 2008 and occupy. Since then it was only known as basically a different word for greed.
As another commenter (who obviously decided to delete his comment) wrote here, I also doubt that a re-branding will ever be successful. It's not like coming up with a new term in economy is something hard to do.
I doubt any of that matters to Stripe, whose customer base consists of small-to-midsize businesses who need to accept payments over the Internet, oftentimes for marketplace-based business models. By virtue of the problem that they want solved, this group is going to skew towards free markets, free trade, globalization, and all the tenets that r/neoliberalism embraces. They may not themselves want to adopt the label (particularly in front of their own customers, who bring their own baggage associated with it), but they'll be sympathetic to the ideas.
Also, the term is still not known/in use to the general public. The set of people who are politically active via Occupy, Tea Party, Trumpism, #Indivisible, etc. is a small subset of all people, and relatively disjoint from the set of people with successful Internet-based businesses.
You did not have to be active in Occupy or any of the other groups to hear the term. Hell, my mother knows is and won't connect anything good with it. The main reason is what happened 2008 and for those who cared a little bit: deregulation. People who take neoliberalism are not necessary anti free market. Those would be the extremists again.
> They may not themselves want to adopt the label (particularly in front of their own customers, who bring their own baggage associated with it), but they'll be sympathetic to the ideas.
So you agree that there was no rehabilitation then?
I still don't understand why you wouldn't just come up with a new term. Is this bad marketing knowledge or intentional?
FWIW, my mother certainly doesn't know what it is, and I just asked my wife and she has no idea. I'd heard the term in the rehabilitated, Sam Bowman sense, but had to go look up the Wikipedia page to see what the controversy was about. I don't particularly identify with any of the labels of mainstream (is there such a thing anymore?) political movements.
It's a really common mistake to assume that the people you hang around with are representative of all people. The U.S. (let alone the world) is a really big place, and we don't all read the same media anymore.
Alright, let's say here in Europe...although that doesn't make you and your wife look quite good here. I guess this is where the Europe vs. US memes grow. I mean, do you watch news? How could you have missed what were the poster words back then?
However,
> They may not themselves want to adopt the label (particularly in front of their own customers, who bring their own baggage associated with it), but they'll be sympathetic to the ideas.
still stands here. Just from a quick lookup on wikipedia, you got to this statement. So if this is even obvious to you, we don't really have to talk about any kind of rehabilitation. The real issue would be some terribly bad informed people.
Both my wife and I watch (well, read) plenty of news. Sometimes even German news. Neither of us particularly care how we'd look in Germany or the rest of Europe, though, since we have no intention of living there.
I'm reminded of something that I think I read here on Hacker News: if you want to see how you're being manipulated, read another country's newspapers. Not because they tell the truth, but because the propaganda in them is directed at the country's own inhabitants, and so it'll have no emotional importance for you. I look at the term "neoliberal" and view it neutrally, because the propaganda around it never really caught on in the U.S. out of certain very niche circles.
There are undoubtedly similar terms & issues in the U.S. where we get very much up in arms but an outsider would be "what's the big deal?" You could probably tell me what they are a lot better than I could (assuming you read U.S. news media), but I'd bet that things like "single payer", "gun control", and "social democracy" make the list, where half the U.S. population considers them a dirty word while most of the rest of the developed world is like "Duh, these are obviously good ideas. Why do you kill your own citizens?"
I don't consider myself or my mother a person that would have gone to the Occupy events back then.
> things like "single payer", "gun control", and "social democracy"
You may be aware that many over here are interested in US politics and culture. It's a historical thing but it's also quite entertaining. I can say that I'm more interested and know more about what's going on in the US then in France or the Netherlands. At least most of the time. We are aware that those three things are being perceived differently by pretty much half of your population. This is nothing abstract here.
The term is used in Germany as a battle cry against the enemies of social market democracy, perceived or real.
I don't think it's a thing in the US.
Occupy came from the US the crash happened there first. But yes, as we see above, there are people who probably don't watch news or watch selective news? I don't know. It's weird.
Good we have the Öffentlich Rechtlicher Rundfunk I guess ;)
I don't agree with you on this.
I think that the existence of the AMA itself proves that at least in some circles you can.
Look at the posts there, it's people having fun with people who identity as neoliberal without any sense of irony. Neoliberal is a dirty word among pretty much every group of contemporary politically minded folks.
You're not entirely wrong in that there is a tongue-in-cheek aspect. However there is also a serious tone and shared set of beliefs.
Take a look at this for example: https://twitter.com/r_neoliberal/status/974992740982370305?s...
Chief Neoliberal Shill is clearly a joke, but these people do believe in the positive consequences of what they're doing.
An AMA in a sub called "neoliberal" is hardly an indicator.
Participation by elites in a group that might at one point have had negative connotations is a sign of it being rehabilitated.
Participation by elites in neoliberalism was the reason why the term has a negative connotation in the first place...
My point is "they don't participate if it's inherently smearing". They are careful about their public selves.
This means that they must believe it has become defendable.
I understood you very well. But maybe we are not talking about the same "elites" because I have no idea how you get the idea. They didn't care about the connotation back then. Why should the negativity of it be relevant today?
I was thinking of financial elites btw.
What's different about this from "Third Way" politics?
Clinton (Bill) was a Third Way neoliberal who basically believed what you and that blog post are saying. Clinton (Hillary) saw those policies defeated 2 years ago.
[S]omething different and distinct from liberal capitalism with its unswerving belief in the merits of the free market and democratic socialism with its demand management and obsession with the state. The Third Way is in favour of growth, entrepreneurship, enterprise and wealth creation but it is also in favour of greater social justice and it sees the state playing a major role in bringing this about. So in the words of... Anthony Giddens of the LSE the Third Way rejects top down socialism as it rejects traditional neo liberalism. — Report from the BBC, 1999,
It seems they are discovering a 30 year old term and blogging about it. What's been rehabilitated?
https://en.wikipedia.org/wiki/Third_Way
It's probably different in degrees, but let's be realistic, nothing has been rehabilitated nor is anything new being said.
Who do you believe is rediscovering a 30 year old term here?
Have you heard of the Adam Smith Institute?
It is a neoliberal think-tank and over the years many of its policies have been adopted by the UK.
That blog post was written by the executive director.
> The inability to come up with a new interesting term (or acknowledge the history behind the existing term) doesn't portend great things.
Quoting your previous deleted post here.
Are you aware that the meanings they're assigning to the term, are actually in line with what was meant when it was first used at the Walter Lippmann Colloquium in 1938?
Who do you believe is discovering a 30 year old term here?
You claimed that that blog post "rehabilitates" the term. I'm saying that the general beliefs that the author describes are well-trod ground within neoliberalism. He's describing himself as a third way neoliberal with slightly more libertarian tendencies.
Have you heard of the Adam Smith Institute?
It is a neoliberal think-tank and over the years many of its policies have been adopted by the UK.
That blog post was written by the executive director.
It'd be more impressive without the credentials because it reads like a random blogger.
Are you aware that the meanings they're assigning to the term, is actually in line with what was meant when it was first used at the Walter Lippmann Colloquium in 1938?
His blog post mentioned rejecting dogmatism. Calling back to 1938 as the "real definition" is very dogmatic. Since then the 1980s through 2016 have happened in the US, all associated with neoliberalism.
Just saying, like the other post, that a blog post and a Reddit post with 120 upvotes hardly change the general meaning of a term.
The point isn't to wow you with credentials. The point is that your previous insistence that this definition isn't correct or common is absurd.
That post rehabilitated neoliberalism. There is now a community of people that use the term this way. Many have tens of thousands of followers on Twitter. Memes are created by its fans. CEOs of huge startups drop-in to do AMAs, etc.
To say that there has been no change in how the term is used or perceived over the last few years is utterly ridiculous.
The point isn't to wow you with credentials. The point is that your previous insistence that this definition isn't correct or common is absurd.
In other words, an argument from authority.
To say that there has been no change in how the term is used or perceived over the last few year is utterly ridiculous.
You may be in an echo chamber because in politics and academics this rehabilitation is not known about.
Can't disagree with you that there may be a change in how it's been viewed, but to state that the "post rehabilitated neoliberalism" is equally if not more utterly ridiculous. Not to one up you, but please realize that. You're talking a Medium blog post vs how hundreds of millions of people view the term (whether they know what it is or not).
Argument by authority isn't fallacious in this instance.
If you are powerful and interconnected with government then the way that you use political terms has a large impact on their meaning.
One of the most powerful think-tanks in the world uses the term this way. That has a real world impact.
Given this, your insistence that "in politics and academics this rehabilitation is not known about" is absurd.
You are right that millions of people probably have no idea or still have a negative opinion of globalisation, etc, however I do not think that this is mutually exclusive with it being rehabilitated in some circles and notably so.
/r/neoliberal holds that particular regulatory and redistribution schemes have costs and benefits, and favors market interventions to the extent that they contribute to a technocratic optimization of general welfare. This alienates both those who dogmatically oppose any intervention in the economy, and those who support interventions which are more emotionally satisfying than effective.
This doesn't fit neatly under any other label as far as I can tell, least of all "neoliberal." It's most closely aligned with centre-left policy, though from a very different value system (more utilitarian than about uniting the working class against their evil overlords).
> This doesn't fit neatly under any other label as far as I can tell, least of all "neoliberal."
This limited interventionism with a market core (both the general orientation and the specific degree of intervention preferred) is pretty much dead-on Clintonian Third Wayism, which is the most significant manifestation of the Democratic side of the late 20th Century “neoliberal consensus”, which in turn is essentially the defining instance of “neoliberalism” in its modern US political usage.
In the modern US political usage (and Wikipedia), neoliberalism refers to Reagan and Thatcher rather than Clinton. Yes, yes, they are "basically the same" from a revolutionary socialist perspective, but still.
> In the modern US political usage (and Wikipedia), neoliberalism refers to Reagan and Thatcher rather than Clinton.
In modern US political usage (I'm not really concerned about Wikipedia) it refers to all of those (and not just those individual figures, but to large swathes of both major parties in the US, particularly in 1980s and 1990s—and similarly often both ruling and major opposition parties in much of the West); there is a reason that there was much talk of a neoliberal consensus in that time period, and to a lesser extent since.
Their Reddit banner links to two articles
https://miltonfriedman.hoover.org/friedman_images/Collection...
https://olivermhartwich.files.wordpress.com/2015/02/neoliber...
I guess with the aim of describing why they chose to use the word.
I have only ever seen the neoliberal label used as an insult against the Democratic party for their lack of real progressive policies and for basically being the pawns of big banks and global elites.
Perhaps self-identification is the next logical step for Democrats? Instead of rigging the primary against a likable progressive candidate like Bernie and causing internal backlash and resentment, maybe they can get Democrat voters to support and embrace a named neoliberal doctrine. Maybe they too can get people to passionately vote against their own self-interests just like the Republican voting base.
> I have only ever seen the neoliberal label used as an insult against the Democratic party for their lack of real progressive policies and for basically being the pawns of big banks and global elites.
Probably because you are too young to remember the “neoliberal consensus” before the hard-right turn of the Republican Party; it wasn't universally an insult then (though it was from the progressive left), and it was specifically bipartisan.
But, sure, now in the US it mostly refers to the center-right faction of the Democratic Party.
“Neoliberalism” is not a partisan term. I guess that is the most common context lately, but many contemporary republicans fit this description and the more nuanced ones.
Decoding neoliberalism in the wild often requires a cultural critique because of the complacency associated. A politician might wager cultural symbolism to corral voters but have an entirely neoliberal agenda. Republicans have actually been keen on this longer than democrats but democrats have a higher ceiling because they are unbeholden to the limits of performing symbols of commitment to tradition now that their voter base thinks of itself as “progressive” which is an advertising notion, not an actual value. So neoliberalism values “progressivism” on the surface and self-interests below the surface.
Donald Trump is very much a neoliberal in the classic republican sense, but he realized the needle oF decadence has shifted away from tradition toward hedonism. Most of the tea party movement was led by neoliberals, too.
Contemporary libertarianism is literally hardcore neoliberalism, whereby the surface-level “progressivism” is peeled back, revealing ultimate individualism.
When we understand neoliberalism, we come to understand Trump and Clinton are mere equals on this spectrum.
People say that about any political affiliation they don't like.
Title correction: "Patrick Collison AMA: Stripe CEO, technologist, builder of economic infrastructure for the internet (on /r/neoliberal)."
(Providing the much needed context, "who is Patrick Collison?")