Badrinath: Hello, everyone.

Welcome to Ideas and Insights, a show devoted to exploring novel perspectives on contemporary issues.

I am Badrinath Rao, your host.

As clichéd as it may sound.

It is worth reminding ourselves we are living in an epoch marked by record levels of inequality.

Since the 1980s, the top 1% net worth increased by $21 trillion.

The bottom 50% lost $900 billion of its wealth.

For the overwhelming majority.

The American dream is a cruel illusion.

Distrust is rampant.

Our institutions are delegitimized.

Our democracy is dysfunctional.

We are now a plutocracy.

Fascist forces loom menacingly on the horizon.

How did we get here?

My guest today is Professor Mehrsa Baradaran, a law professor at the University of California, Irvine and an acclaimed authority on banking law.

She is the author of The Quiet Coup neoliberalism and the Looting of America, published by W.W. Norton and Company.

This year.

Neoliberalism seeks to revive classical liberal doctrines of individual liberty, property rights, free markets, and stable social order.

Yet in reality, it hyper glorifies market forces.

And its main agenda, according to Professor Borodin, is to weaken state power and augment the liberty of corporations.

Neoliberalism, professor, Baradaran maintains, can be checked.

She advocates human development and the reinstatement of democratic values of equity, equality of opportunity, fairness and trust.

Professor Baradaran joins me to discuss her ideas further.

Welcome to Ideas and Insights, Professor Baradaran.

Thank you for joining us today.

Prof. Mehrsa : Thank you so much for having me.

It's an honor to be here.

Badrinath: Indeed.

Let's begin with the main theme of your book.

Your work is an interesting analysis of the impact of neoliberalism on our economy and on virtually all facets of our life.

What, according to you, is neoliberalism and what does that have to do with what you call the looting of America?

Prof. Mehrsa : Yeah.

So neoliberalism is very tricky to define because it sort of means everything and nothing depending on who you're speaking to.

But, you know, Milton Friedman wrote in an article, sort of, you know, calling the ideology that they were putting forth, he and his group of economists that were the neoliberal sort of, you know, intellectual fathers and the idea of it was that it you know, it was a prioritizing the market over the state.

The, the, the decisions of, corporations and market actors over the, democracies that would check them.

That that was the idea.

The idea would be that we would get more liberty, more shared prosperity by prioritizing the market.

That's what it said.

It was.

What it actually was, was a, opening up of the Democratic levers who, money, the forces of, money that have in, you know, the last 40 years since neoliberalism has been the political order, been corrupting and corroding, the legal system.

That's what I argue in the book.

Badrinath: Well, while talking about neoliberalism in the global context, you say that it's an ideology that succeeded the empire.

It aims to create the hegemonic, retain the hegemony of the, Western nations, and is all about promoting an unjust world economic order.

How does neoliberalism play out on the global scale?

And what role do neoliberal thinkers from the West, particularly the United States, play in this process?

So, you know, there have been books about neoliberalism before, and this is the gap that I found in the scholarship that I tried to fill in mind is that, you know, the original neoliberal founders, you know, you know, how to the initial meeting in the Montpellier and Society in 1944.

This is as the war is ending, that World War Two.

And you know, this these Austrian economist, these American economists are really trying to scramble on what how do the Western nations sort of maintain their empires across the world?

But, Neal, and most scholars really point to Reagan as the first neoliberal, president Reagan and Thatcher and these policies.

But, you know, you're going you're skipping from 1940 until 1980.

That's a huge gap in terms of where where was neo liberalism in the middle?

And that's what I follow in the book is what happens.

You know, in in the very crucial decade of the 1960s, as, empires is, is ending based on the last ideology, which was essentially and very explicitly racial hierarchy.

That is how the British dominated, their colonies and the French and the Spanish and, to a, you know, you have the Nazis taking that ideology and, you know, devastating Europe.

And committing mass holocaust, based on racial supremacy, so that doctrine can no longer serve.

How it, how it had the, justify the previous empires.

And so there's this interregnum in between as, as how how do you justify, you know, the, the oil corporations that were still in the Middle East, the copper corporations that were in Chile and the, you know, the the resource extraction upon which, you know, the British Empire had been based in the French Empire and the American Empire and in less but, you know, significant ways at the time.

And that ideology becomes, neoliberalism.

it's not just this ideology.

There's also violence.

There's also, you know, dictators being put in and and contra weapons being sent to South America and the Middle East.

There's definitely armies, also in, you know, Vietnam and the threat of violence.

But this is the the dominant ideology that reigns after that tense interregnum that becomes the norm.

It's really hard to even see past the world that neoliberalism builds, but it is empire nonetheless, under different terminologies.

It's now just corporations.

It's it's called the free market.

But the debt goes one way, the resources go another way.

The poverty state, in the countries that were poor during colonization and the wealth, enriches the countries that were enriched during empire with some small changes, but not too many.

Badrinath: While it is true that, neoliberal forces, tried to weaken nation democracies, destabilize, governments across, the former colonies.

You also talk about how there were concerted attempts from newly, liberated states to push back.

You mentioned the nonaligned Movement, which met in 1955, in Bandung, Indonesia.

That, to me is an interesting development.

Unfortunately, it didn't take off.

Why do you think that happened?

Prof. Mehrsa : Didn't take off because it was cut off at the knees by the newly formed empires.

And this is, you know, the both the Soviet Union and the the United States at that point were empires that were, ideologically anti empire.

This is the irony of what is happening in this time, is that the Soviet Union is calling the US a, you know, capitalist empire, and, you know, the US is calling the Soviets the evil empire.

Both things are true.

They were both, you know, empires, in different ways.

And and they were also not empires in ways that the, the British had been very explicitly empire.

These are newly formed, powers and most of the newly freed nations in the global South, essentially don't want to be caught in this game of empires.

There's, there is this, war over these, former colonies between the, the Soviets and the Americans.

And so these nations joined together in several places in Paris and by.

You know, OPEC is, becomes part of this to, to try to assert their sovereignty, against this, you know, this, Cold War, you know, these two, nations.

And so they form this nonaligned movement, the premise of which is we're not aligned with either of us.

Just leave us alone.

And we will we will not choose sides.

We don't want to be part of this.

And part of that also was give us one, one nation, one vote at the UN or and you know, in, in regional specific things.

OPEC for example, was against their seven sisters oil companies or seven oil companies that were using the nations to go against each other.

And so the nations of the Middle East joined forces.

And this is, you know, Iran, Egypt, every country that had oil to, to to form a, you know, they would call it a cartel, but form a group to negotiate against the seven sisters, which were actually a cartel.

So some of those nations, some of those leaders are, you know, taken down by coups, you know, by the CIA and the British.

You know, Iran is an infamous example.

That was the first of many of those, violent interactions.

And, you know, new people are placed, some are, you know, taken down by violence in Vietnam, Cambodia, Chile, lots of other, lots of examples of just straight violence during that time.

But those but those movements are cut off, you know, between the 1960s, you've got just tons of, you know, freedom fighters and all of these, movements going across the world and civil rights in America to the mid 70s.

It's relatively quiet.

And that's not because people got what they were demanding.

It's because, you know, through violence, through ideological takeover, through these new ways of doing things that got, silenced.

you mentioned two institutions.

One is the Federalist Society, and the second one is the Law and Society Network.

And you say that both these institutions and the people, who were leaders in these bodies, were instrumental in entrenching neoliberal, ideas in the judiciary.

And that process had disastrous consequences.

Can you take them one by one and tell us, for example, what the Federalist Society did, how it operates, and why you think it is deeply disconcerting?

Prof. Mehrsa : Yes.

You you cannot justify, the, looting of other people's democracies without some of those forces coming back home.

You know, this this was that sort of international karma of the thing which is that there there's these right wing think tanks that are formed to do this thing abroad.

You know, these corporations that are losing their, rights in these other countries.

They're they're sort of takings, form these right wing groups to subtly maneuver and take over those corporations, those those nations and those forces also do this in America.

So as America is, America joining with the you know, British, and, you know, really sort of, sort of doing coups right around the world, to, take down these democratically elected or at least, you know, sovereign nations, that that those same forces start a coup inside of the American democracy as well.

And I point to two of these organizations.

One is Federalist Society, and it's law and economics, which are the two forces in America?

They're, you know, you trace the money and it's the same foundations, you know, the Koch brothers, you know, cause your heritage, American Enterprise Institute, all of these same right wing think tanks are, involved in the creation of these two legal institutions and the Federalist Society.

Basically, you know, starts at Yale Law School, spreads across law school very, you know, top down, sort of, you know, student based group.

Right.

So the Federalist Society is one branch of this law, and economics is much more diffuse, but, similar provenance.

Right.

These are right wing funded groups that have an ideological, you know, takeover in mind of the law because they understand that the way that the civil rights movement had worked is through the courts, you know, so they want to take those courts back.

And that's the Federalist Society's essentially mission.

The the founding of the federal society was very much an anti Brown versus Board of Education anti civil rights group.

You you don't see it very clearly.

But if you trace it back to its origins, that's that's what, that's what was the impetus of it.

It's, it's harder to see now.

So the Federalist Society basically, you know, creates a network of judges and doctrines for these judges to sort of pledge allegiance to, right, originalism and textualism that they seem on their face to be neutral ways of reading the Constitution, but all have outcomes of rolling the clock back to before, you know, civil rights before these equality, movements, you know, Roe versus Wade becomes one of them.

But it's very much interlocked in this larger system of right wing groups.

The federal society has been incredibly successful in taking over the federal courts, that, you know, six out of, six out of nine Supreme Court justices, all of the, Republican appointees are Federalist Society judges, all of them.

And you look at the the appellate courts down, into the district courts.

And there's a way that the right has that it enforces ideological, you know, purity, this litmus test for their judges.

And that's a federal society.

Law and economics is harder to pinpoint, but I would argue much more profoundly, you know, influential on law as it relates to corporations and businesses and banks, which is the area I study and law and economics is the idea that that judges should be guided in their decisions, not by sort of mushy, you know, metrics like justice, but, very, you know, scientific ideas like cost benefit analysis and economic principles, the, the meat of law economics is anti-regulation.

It's diminishing the power of the courts, diminishing the power of the regulators, on banks, on corporations.

And so these have been ongoing for the past 30, 40 years.

And I trace in the book what has happened to the law.

It's perforated with loopholes.

You have, you know, the industry itself, writing their own laws and through through these, these movements that that purported to be just legal ideologies and not, you know, right wing attempts at a takeover of the law, but that that is what they were Badrinath: aside from the judiciary.

You discussed at length in your book the havoc neoliberalism has played in the banking sector, an area that is, your field of expertise.

And you say that neoliberal policies have resulted in the creation of mammoth, risky, deregulated banks, and that is not good for the economy.

How did this happen?

And what are the consequences of neoliberalism in the banking sector?

Mehrsa : You know, to to explain, it's not it's not just banking.

It's also monetary policy.

And the the first, you know, you look at Enoch Powell, who was, a just straight racist, you know, in the, he's a British prime minister, some, you know, something cabinet, member and gives this speech in 1906, in the 1960s, called The Rivers of Blood.

All these immigrants are coming from the former colonies.

And he's saying the streets will be filled with like, the rivers will be full of blood, you know, and very like, you know, the the British race is going to be, diluted by intermixing with these people.

Really, really quite racist.

He lost his job for it that same year, as soon as he couldn't say that.

Those racist things, he goes and talks about monetary policy.

Okay, same with the Montpellier and society.

Their first aim is to, take away the money, power from the democracy and place it away from the people.

Okay, so that that that to understand the significance of neoliberalism, attempt at the, taking over the banking policy, it's important to understand that link because money is a policy decision, the creation of money itself, the way that money circulates, credit, all of that isn't we don't have money, you know, it's not gold in a vault, which is what they would like you to believe.

Money is a creation of a society.

And so understanding that which these economists did, and they saw what was happening across the world, which is that as soon as a nation gets sovereign, you can create your own money.

America was, you know, really being pushed to enhance social policy, to include, you know, black communities that had been left out then, you know, the, the founding.

And as soon as the net was about to include these racial others, they closed the net off.

And that that's what I sort of trace.

And that's what comes out in baking.

Now.

So at first it's just close it off, make money scientific, you know, really kind of, constrain it, make it scarce so that it doesn't, fund these things that the population doesn't want to fund.

And, by the way, use that race baiting to win seats.

You know, that's kind of that's the whole Nixon, agenda.

And then, what happens after that is once now you have this sort of technocrats and these insulated regulators making these massive policy decisions.

Then you get into the, you know, Reagan era, the 80s and the 90s where, you know, you're allowing these banks to essentially create money in newer and newer rounds of finance.

And until finance essentially takes over the entire economy, you know, finance used to be this tiny little thing, and now it's everything, and it's piling risks on top of risks, all of which are subsidized and guaranteed and insured by the federal government and still are.

So that's that's where banking and this is my third book.

And I've written many articles before that following that story.

And that story is a really devastating story.

If you're looking at all at racial equality or just equality in general, you know, banks leave, payday lenders come in, banks stop lending or never start lending into these red line communities are not funding mortgages and every inequality in America can be explained by these decisions that that had to do with credit policy.

You know, my last book was called The Color of Money.

And the color of money was white and enforced to be white.

You could not lend, you know, you couldn't have these, the federal funds going to black communities.

So those are incredibly important policy decisions that completely get taken over by neoliberalism.

And I would say that that was almost the impetus of neoliberalism from the beginning, is to, to to close off the the funds that were freely flowing before that, Badrinath: while talking about the impact of neoliberalism generally and the ways in which it works, you characterized neoliberal strategies as devious and say that they focus on two, types of issues.

Broadly speaking.

One is discrediting democracy and, making people, get the impression that democracy is dysfunctional.

It is rife with corruption and therefore must be, ignored.

And the other thing they try to do, is neoliberals want to gain control of the levers of policymaking bodies.

How do these strategies play out in different sectors?

Very briefly.

Prof. Mehrsa : So the, you know, the white, economists who were the the leading edges of this start there.

They're motivated by Brown versus Board of Education, really, all of them.

You can really trace it back to this really radical shift in American policy and the the thing that they feel and they say this is victimize as taxpayers, as, you know, Americans, that all of a sudden they have to fund things that they don't want to, which is integrated schools.

And, you know, an extended democracy.

So soon as democracy threatens to become real, you know, and including everybody, they discredit democracy.

They feel, like it was theirs to control.

And now that it's not, it's not it's just not valid.

And so, you know, James Buchanan, writes, you know, the calculus of consent, saying that essentially, majorities are the tyrants of democracy because they're taking away from the minorities who are the, you know, taxpaying, you know, actual, you know, pillars of, society.

And so there's that's, that's the, the, the core of the thing.

It's just resentment that at democracy itself, at society.

Right.

So Margaret Thatcher has this famous quote, there's no such thing in society.

And that's what neoliberalism is trying to do, and it's trying to enact.

The irony is that the way it's doing it is by taking over the democracy, by, you know, showing that actually democracy was working before they got in.

So, you know, you're discrediting you're you're kind of projecting it doesn't work.

And therefore we're going to come in and flood the field.

So as as Reagan is promising small government fewer lies, he brings in the entire Heritage Foundation to take over the administrative state, to create more laws, more complex laws that favor the industries that they want.

So it's not that they're diminishing the government.

The government's gotten bigger and bigger and bigger every year that neoliberalism has been a reigning, ideology and more laws, more complexity, more lawyers.

Badrinath: You end the book, professor brethren, by characterizing neoliberalism in an interesting way.

You say it is a big, dumb, self cannibalizing machine that has led to the financialization of society.

It has created distrust and delegitimized institutions and so on.

However you end on a very optimistic note.

You say that we can reinstate, the democratic ethos of genuine democracy, which you say has not been practiced anywhere.

Genuine free market policies, have not been, put in place anywhere.

And that's what you plead for.

And you say that if we emphasize human development, invest on the weakest neighborhoods, if we promote equality of opportunity, equity, fairness, justice and so on, that we can vanquish neoliberalism.

This is an encouraging thought.

Can you elaborate on this briefly, please?

We don't have too much.

Prof. Mehrsa : Yeah.

Yes.

The biggest, the biggest, you know, of liberalism, I would say, is that they called the free market a thing that wasn't, you know, free market is what the nonaligned nations, the southern, global South was arguing for.

Let it be free.

Let us sell you oil rather then you take it.

This was Mossad's offer to the West is.

We will sell you the oil on a market.

You can't just come and take it and threaten bombs and assassinations if we don't give you our resources and and neoliberalism yet pretends to be a free market.

So to have a free market, we have to have freedom and justice.

And those things were the refusal that the neoliberalism tried to cover it.

To have a free market, you have to have a democracy.

We have neither.

Okay.

So they they tried to say, oh, it's either you're going to be tyrannized by government or tyrannized or have a free market, right?

Failing to to, sort of close a loop and that you can be tyrannized by corporations just as much as you can be tyrannized by the government.

We actually have both now.

We have corporate corporations, billionaires, you know, colluding with lawmakers to make laws that benefit both at the expense of all.

So it's actually not working, and I do I did chase kind of the bad guys.

I think the bad guys are gone at this point.

The market is a big dumb machine.

That's what I call at the end, in that it is taking our investments and investing them in the same private equity firms that are coming after our jobs, our health care, our education.

And the thing that is they're taking out is social trust and society, which is and has always been the underpinnings of a monetary system, of a market.

You cannot have a market without trust.

You cannot have an economy without a society.

And so it's eroding all of those things.

It's not that we have a good free market.

It's not profitable.

Okay?

Neo liberalism has yielded a few profits in the past for few people, but it's invested in dying industries, oil, weapons.

These are not industries that we need as a humanity to actually make profits and a future that is thriving for any of us.

So that and those things got lodged in the law through subsidies.

And it's it's that that is coming.

It's imploding.

We're seeing it all around us.

And the distrust is at record levels.

The danger is that it doesn't.

These things don't implode just peacefully.

The fascists come and they try to fix it.

And this is also the lesson of history.

When corruption is high and and distrust is high.

Some group with guns say we'll fix it by driving out some scapegoat.

Right?

So whether it be the Jews in Nazi Germany or, you know, the, the Islamic Republic of Iran taking out, you know, any, any Westerner or any, any dissident thought women usually are on the line when these things happen.

So, we're seeing it and I think Americans are too naive if if they think that if fascism is at their door.

It hasn't been yet, and I think we can and I that this is the hope.

I do think we have the tools to overcome it, but those those are the stakes.

Badrinath: We are completely out of time, professor.

Baradaran, it was a great pleasure talking to you.

Thank you for likewise sharing your insight.

Thank you very much.

Prof. Mehrsa: Thank thank you for your insightful questions and your thorough read.

I really, really appreciate it.

Great interview.

Thank you.

Badrinath: That's it for today.

Join us next week for a new episode of Ideas and Insights.

We would love to hear from you about this episode.

You can email us at Ideas and insights@e.org.

Remember, you can access ideas and insights anytime by visiting our website.

Org e.org/ideas and insights.

Thanks for joining us today.

We will see you next week.

Until then, goodbye.

I.