CeleryKills

Why “Efficiency” Keeps Failing People

I live in a place where people still talk policy on ferry decks and in trailhead parking lots, so I am going to be plain. The I like Richard J. Murphy as an economist, and I recently saw his video “Neoliberalism was designed to fail ordinary people, and it is through its politics of destruction” where he calls out neoliberalism as “the politics of destruction.”

That is not a branding exercise, it is a claim about design. When you treat markets as the ultimate arbiter, shrink democratic capacity, and privilege asset owners over workers, you do not stumble into an economy that fails ordinary people, you build one. If that sounds harsh, ask yourself a simple question: after forty years of privatization, deregulation, and austerity, did broad‑based security grow, or did precariousness spread while a narrow slice captured the gains (Harvey, A Brief History of Neoliberalism, 2005; Piketty, Capital in the Twenty‑First Century, 2014)?

The politics of destruction is a clean phrase for a system that sidelines voters in favor of balance sheets. Markets do not vote, owners do. When key services migrate from public governance to private contracts, decisions move from open deliberation to closed rooms where fiduciary duty runs to shareholders, not neighborhoods. We have seen the pattern in sectors that touch daily life: water, energy, housing, rail, care. Revenues rise, fees rise, and accountability thins, while performance claims lean on marketing rather than independent audit. This is not a conspiracy, it is a structural outcome of incentive design that treats essential services as rent streams, not common infrastructure (Stiglitz, People, Power, and Profits, 2019; Hall, Public Services International Research Unit reports on privatization outcomes, 2015).

The transcript argues that neoliberalism favors ownership over production. Economists have a name for this tilt: rentier capitalism. When profits flow more from toll‑taking than from making, value created in workplaces is siphoned to asset holders through interest, monopoly margins, and land rents. The effect is a quiet tax on everyday life that shows up as higher housing costs, higher utility bills, and persistent markups in concentrated industries. The evidence is not subtle. Market concentration and markups have risen across many advanced economies since the 1980s, and the labor share of income has fallen in tandem, especially in sectors with winner‑take‑most dynamics (De Loecker and Eeckhout, “The Rise of Market Power,” 2017; Autor et al., “The Fall of the Labor Share and the Rise of Superstar Firms,” 2020).

Once you see the rent logic, you see the politics. High inequality does not merely reflect the economy, it shapes the rules of the game. Money buys voice, voice shapes policy, policy protects money. That loop hardens into what looks like fate. Yet the loop is neither natural nor inevitable. Austerity rules that starve public services are choices dressed as necessities. We have lived through rounds of “there is no alternative,” followed by service degradation, followed by “government does not work,” followed by more outsourcing. That spiral did not happen by accident. The link between fiscal squeeze and political backlash is well documented, as is the role of post‑crisis austerity in fueling anti‑system movements across the West (Blyth, Austerity, 2013; Tooze, Crashed, 2018).

The claim that the state is “like a household” is the most durable myth in this story. Households cannot issue the currency they spend and cannot tax to offset inflationary pressure. Monetary sovereigns can. That does not mean spending is costless, it means the relevant constraints are real resources, productive capacity, and inflation, not a checking account that must be topped up before care can be delivered or bridges built. Treat taxes as if they fund spending one‑for‑one, and you miss their strategic roles in shaping distribution, curbing excess demand, and limiting the power that comes from extreme wealth. Treat taxes as levers, and you remember they are tools for governing the economy we have, not ritual offerings to a deficit god we invented (Mitchell and Wray, Full Employment Abandoned, 2005; Mazzucato, The Value of Everything, 2018).

If you want to test whether the politics of destruction is about growth or about upward redistribution, follow the cash and the capabilities. Public investment builds capabilities. A rentier turn liquidates them. The UK’s experience with privatized water, for example, shows high payouts to investors, rising debt loads at operating companies, and chronic underinvestment that later requires public rescue or stricter oversight to address, which is a long way of saying that gains were private while risks flowed back to the public ledger. Similar stories have played out in rail franchising and clinical outsourcing, where quality assurance costs rise as contract complexity grows, yet the headline narrative still invokes “efficiency” to rationalize further retreat of the state (National Audit Office, The Financial Sustainability of the Water Sector, 2023; Crouch, The Strange Non‑Death of Neoliberalism, 2011).

The transcript pushes the moral point, and I will not dodge it. An economy that treats care as a residual and insecurity as normal has lost the plot. This is not only about ethics, it is about macroeconomics. High inequality suppresses broad demand because the marginal propensity to consume is lower at the top. In plainer words, when the base cannot spend, multipliers run in reverse, small businesses gasp, and the growth we keep being promised does not arrive. This is not new. It is the textbook logic of demand‑constrained economies, amplified by debt overhangs and elevated markups in concentrated markets (Stiglitz, The Price of Inequality, 2012; Saez and Zucman, The Triumph of Injustice, 2019).

So what do you do if you want out of the failure loop. The transcript sketches a direction. Reassert democratic control where monopoly or natural monopoly characteristics make competition a fig leaf. Curb rent extraction through tax reform, competition policy that actually bites, and, where needed, changes in ownership and governance. Treat taxation and spending as instruments for building shared capacity, stabilizing prices, and distributing power, not as devotional practices performed for their own sake. None of this is exotic. Postwar settlements that built mass prosperity used versions of these tools, and contemporary industrial strategies that target decarbonization are rediscovering them because the scale of the task demands public leadership and patient capital (Rodrik, Straight Talk on Trade, 2017; Mazzucato, Mission Economy, 2021).

The hard part is the politics. Inequality is not a policy mistake to be corrected at the margin, it is the foundation of a political economy that has worked as designed for those who designed it. When reformers propose tinkering without touching the engines that produce rent, results feel like rearranging deck chairs. That is why the transcript keeps returning to naming. If you do not name the system, you cannot change it. If you cannot change it, you will keep blaming underfunded schools and understaffed hospitals for failing tests they were tricked into failing. Do I think a politics of care is soft. No. It is the only version that takes resilience seriously, that prioritizes the investments which raise long‑run capacity, that treats the climate transition as infrastructure rather than a coupon code (Milanovic, Global Inequality, 2016; Storm, “Capitalism and Climate Change,” 2020).

I am biased toward the vulnerable, and I am fine saying that out loud. Any economic model that cannot explain how it protects the least powerful is not a model, it is a defense of privilege. The good news is that the fixes are not mysterious. Expand automatic stabilizers. Invest in public health and care as productive sectors, not cost centers. Tax windfalls and rents where markets have failed to discipline them. Tighten merger policy and rebuild state capacity so regulators can actually regulate. These are choices, not acts of nature (Stiglitz, People, Power, and Profits, 2019; Philippon, The Great Reversal, 2019).

If you want a litmus test, use this: does a policy move decision rights toward citizens, or away from them. Does it build capabilities that persist beyond a quarterly report, or does it strip assets to pay dividends. Does it widen the circle of security, or does it sell you a premium tier while the floor rots. The politics of destruction has given us a lot of premium tiers. The rest of us are asked to be grateful for the app.

Before we call it a day, let me leave you with questions that would make sense on any Cascades bus ride where people still argue in good faith. If markets are tools, not gods, which essential services should be governed as utilities, with public obligations that outrank payout schedules. If the state’s real constraints are resources and inflation, not a household checkbook, how should we redesign tax and spending to target bottlenecks, curb rent, and build capacity instead of polishing fiscal optics. If inequality is a design choice, not a weather pattern, what democratic structures would keep capture from re‑emerging once we curb it the first time.

I do not think those are abstract questions. They are the itinerary out of the failure loop.

References

• Autor, David et al. “The Fall of the Labor Share and the Rise of Superstar Firms.” 2020.
• Blyth, Mark. Austerity: The History of a Dangerous Idea. 2013.
• Crouch, Colin. The Strange Non‑Death of Neoliberalism. 2011.
• De Loecker, Jan, and Jan Eeckhout. “The Rise of Market Power and the
• Macroeconomic Implications.” 2017.
• Hall, David. Reports from PSIRU on privatization outcomes in water and other utilities. 2015.
• Harvey, David. A Brief History of Neoliberalism. 2005.
• Mazzucato, Mariana. The Value of Everything. 2018.
• Mazzucato, Mariana. Mission Economy. 2021.
• Milanovic, Branko. Global Inequality. 2016.
• Mitchell, William, and L. Randall Wray. Full Employment Abandoned. 2005.
• National Audit Office. The Financial Sustainability of the Water Sector. 2023.
• Philippon, Thomas. The Great Reversal: How America Gave Up on Free Markets. 2019.
• Piketty, Thomas. Capital in the Twenty‑First Century. 2014.
• Rodrik, Dani. Straight Talk on Trade. 2017.
• Saez, Emmanuel, and Gabriel Zucman. The Triumph of Injustice. 2019.
• Stiglitz, Joseph E. The Price of Inequality. 2012.
• Stiglitz, Joseph E. People, Power, and Profits. 2019.
• Storm, Servaas. “Capitalism and Climate Change: Can the Invisible Hand Adjust the Natural Thermostat.” 2020.
• Tooze, Adam. Crashed: How a Decade of Financial Crises Changed the World. 2018.