CULTURE
A tribute to former GE CEO Jack Welch on the floor of the New York Stock Exchange in 2020
The Enablers of Predatory Capitalism
How free-market economists, central bankers, rapacious CEOs, and free-trade diplomats undermined the New Deal order RICHARD DREW / AP PHOTO
By Robert Kuttner For half a century, bad economics has provided intellectual cover for bad government. Those in charge preferred economists who would validate free-market fantasies, even though they had been disproven by events. The dominant policies served large banks and multinational corporations at the expense of working people. This was not only unjust; it was catastrophic. Mar-
kets mispriced carbon and generated global standing of the role of money, the banking climate disaster; they mispriced financial system, risk and uncertainty, and the failure securities and produced the collapse of of markets to price accurately, as well as his 2008; they deregulated labor, stagnating most famous insight—the related failure of the macroeconomy to equilibrate at a point wages even as GDP more than doubled. that realized its potential. John Maynard Keynes demolBooks ished the premise of perfect market But “Keynesianism” was soon efficiency, revealing it to be a theowatered down by mainstream interretical and empirical fraud, and the Great preters into little more than a formula for Depression provided the exclamation point. using deficit spending to temper recessions. Keynes’s economics combined a rich under- This was known as the neoclassical synAUGUST 2022 THE AMERICAN PROSPECT 53
