Pitchfork Economics with Nick Hanauer Back to Basics Series: What the hell are they talking about? Econ terms explained! (with Nick and Goldy)
Why Neoclassical Economics and Neoliberalism Are Killing the Economy Myth
Neoclassical economics assumes humans are perfectly rational and selfish, that value equals price, and that economies always reach an equilibrium where improving one group harms another.
Neoliberalism builds on this, promoting the idea that freedom means freedom from constraint, competition and markets are the only organizing principles, and companies exist solely to maximize shareholder value.
This ideology has justified policies like low wages and tax cuts for the rich, which are "objectively false" and harmful, yet widely accepted like an immutable law.
Nick explains that these beliefs ignore real human behavior, the complexity of social systems, and alternative economic models that see value in welfare and cooperation.
Understanding these flawed foundations is key to challenging harmful economic orthodoxy and imagining a better economy.
Neoclassical Economics Misconceptions
- Neoclassical economics assumes humans are perfectly rational and selfish self-maximizers.
- It holds that prices reflect true value and markets are in efficient equilibrium, which Pitchfork Economics disputes.
What Is Neoliberalism?
- Neoliberalism evolved from neoclassical economics and values freedom only as absence of constraint.
- It promotes competition as sole organizing principle and shareholder value maximization as corporate purpose.