Law professor Mehrsa Baradaran joins Nick and Goldy to reveal how neoliberalism wasn’t just a misguided economic theory—it was a “quiet coup” that rewired our laws, courts, and institutions to elevate capital above democracy. Drawing from her new book The Quiet Coup, Professor Baradaran explains how this ideology became like the air we breathe: a pervasive worldview that shapes our politics, our markets, and even the way we understand ourselves. They explore how elite power captured the machinery of government, why the market has become a runaway algorithm fueling inequality, and what it will take to break free from an ideology so deeply embedded we mistake it for common sense.
Mehrsa Baradaran is a professor of law at the University of California, Irvine, and one of the nation’s leading experts on banking law, inequality, and the racial wealth gap. She is the author of The Quiet Coup: Neoliberalism and the Looting of America, The Color of Money, and How the Other Half Banks. Her research traces how financial policy, legal structures, and political power shape inequality in the United States.
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Goldy:
The last five decades of trickle-down economics haven’t worked, but what’s the alternative?
Nick Hanauer:
Middle-out economics is the answer.
Goldy:
Because the middle class is the source of growth, not its consequence.
Nick Hanauer:
That’s right.
Announcer 1:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Goldy:
We are recording this podcast in a year in which a very loud coup has been going on before our very eyes as the Trump administration and his cronies have been really quite publicly dismantling democracy, all of our democratic institutions and norms. But it turns out this didn’t happen in a vacuum. There’s been a quiet coup going on for at least the past 50 years according to our guest.
Nick Hanauer:
Yes, it’s true. And today we’re talking with Mehrsa Baradaran, who’s a professor of law at UC Irvine, and one of the country’s leading experts on banking inequality about her new book, The Quiet Coup: Neoliberalism and The Looting of America. What’s super interesting about her perspective, which is somewhat different from ours, although highly aligned-
Goldy:
Yeah, very aligned.
Nick Hanauer:
Aligned, but just a different flavor. What she focuses on is less the economics of neoliberalism and more the way in which it has influenced our legal and institutional structures, which is equally valid and important, and how corporate power quietly captures laws and has hollowed out democracy. I think that’s just so interesting. It’s something that you and I think know a lot less about than the economics. So it should be very interesting to hear from her about her perspectives on all this.
Mehrsa Baradaran:
My name is Mehrsa Baradaran, and I’m a professor at UC Irvine School of Law, and I’ve written ‘The Quiet Coup’, which is the latest book, and previous to that, ‘The Color of Money’. And then previous to that, ‘How The Other Half Banks’. And I have another book coming up that I’m in the process of about the gold standard and war, how money and war have been connected from the very beginning in Greece. So that’s in progress.
Nick Hanauer:
Fantastic. Mehrsa, thanks so much for being with us.
Mehrsa Baradaran:
Thank you for having me. One of my favorite podcasts.
Nick Hanauer:
Like the title of your book suggests you argue that Neoliberalism wasn’t just an economic idea, but a quiet coup that reshaped our laws and institutions. So just if you could describe for our listeners what your basic thesis is.
Mehrsa Baradaran:
One thing I want to say as sort of setting the groundwork is ideology is a little bit different than dogma or belief systems. Ideology is a system that you live in and it takes some time actually for you to understand that as an ideology. So for example, we can look back the Middle Ages and look at all the ideologies that they had, but they at the time were like, “No, this is just the way the world works.” I think neoliberalism is very similar. I think work at the end of it. It’s imploding, it’s done.
But we don’t quite understand that we’ve been living in this very deep-seated ideology for the last, I would say, 50 or so years. And it does come out as an economic idea, but it’s more like a religious idea. It is that the market is this thing out there that cannot be perturbed, that must be let to do its thing. And if you touch it, it’ll explode, but you have to maneuver it through Federal Reserve tinkering and all of this stuff. So it really is like a God that was created, that it was heresy to socialism or anything like that, to sort of tinker with it. So yes, it’s an economic idea, but really it was, as I say in the book-
Nick Hanauer:
It’s what our friend Yuval Harari calls our inner subjective reality.
Mehrsa Baradaran:
Yes.
Nick Hanauer:
It is the stack of ideas that holds our society apart. It’s the air we breathe, the water, we swim in the water, and it is completely invisible to most people.
Goldy:
The stories we tell.
Nick Hanauer:
It is the matrix. Literally-
Mehrsa Baradaran:
It’s the matrix.
Nick Hanauer:
It is literally the matrix.
Mehrsa Baradaran:
Literally the matrix, and it’s everywhere. It’s pervasive. It’s in our family structure, it’s in our relationship structure. It’s in the way we think about ourselves in the world. That’s how ideology works, and it’s actually… I draw a little graph in my class when I teach any liberalism classes. If you start with Greece and slavery and war, and it’s very blunt instruments of tyranny, but the more advanced you get in society, the more the tyranny and the oppression gets very abstract and it’s-
Nick Hanauer:
The trickier it gets.
Mehrsa Baradaran:
And it’s nuanced and it’s deep. It’s almost like we’re self-oppressing ourselves through these ideas, and it’s now just embedded into the way that we conceive of the world, the way that we value our own selves. So neoliberalism is the latest iteration of this thing that has been around. I would take it back. I mean, it’s hard to know where it comes from, but definitely the second we enslaved other human beings and created a dogma about why that was okay. You could take it to Great Britain, you could take it to Greece. You could take it to any empire where money and war connected.
Nick Hanauer:
Sumer, right?
Mehrsa Baradaran:
Right, right. Maybe.
Nick Hanauer:
No, the law of Hammurabi.
Mehrsa Baradaran:
And then it gets more, but it gets more and more developed. It’s the same thing. It’s the same thing.
Nick Hanauer:
We are rich, you’re poor, and we need to keep it that way.
Mehrsa Baradaran:
And there’s a reason why, and it says either God says it or science says it. It’s Darwin, it’s the creator, it’s whatever. And now it’s the market. It is the laws of supply and demand that only the macroeconomists at Chicago understand. And if you don’t agree with them, then you don’t understand economics.
Nick Hanauer:
That’s right. You’re violating a law of nature.
Mehrsa Baradaran:
Yes, yes, exactly.
Nick Hanauer:
Absolutely. I know we’re getting a little bit off track here, but it’s so fun to hear you talk about this because as Goldy and I and our colleagues have interrogated this over the last decade and a half or whatever it is, it’s amazing because the more you think about it, the more you see it.
Mehrsa Baradaran:
Yes, yes, yes.
Nick Hanauer:
It’s visible to people.
Mehrsa Baradaran:
It’s like waking up. It’s the red pill. Like you said, it’s the matrix.
Nick Hanauer:
It’s everywhere. All these assumptions, all these ways we have of describing the world, our place in it, who gets what and why all of it. It is fascinating, and I agree with you emphatically that neoliberalism like Voldemort and evil will never die because the yearning of powerful elites to organize societies in ways which benefit them and prevent other people from taking their place is as old as history, and it will never disappear. Right?
Mehrsa Baradaran:
Well, so I start… Maybe not this book, but I think I start this book with the James Baldwin quote about time rends all doctrines and makes them a lie. So there is a way, if you follow ideologies through time, they do have to shift because people do resist.
Nick Hanauer:
They change forms, like Voldemort.
Mehrsa Baradaran:
They change forms. They change forms.
Nick Hanauer:
Like Voldemort.
Mehrsa Baradaran:
Yes.
Nick Hanauer:
But they never go away, right?
Mehrsa Baradaran:
They haven’t yet.
Nick Hanauer:
Okay. We can hope for that wonderful Star Trek future.
Goldy:
They evolve and adapt.
Mehrsa Baradaran:
They evolve and adapt just as we evolve resistance. Resistance evolves and then the ideology evolves with it. So yes, you have to be constant, and this is why this is so important, the work that you’re doing, the work that we’re doing is to constantly be calling out, this is the new bullshit. This is the new bullshit. This is the new bullshit. And the bullshit gets more and more nuanced and harder and harder to extract because it becomes deeper and deeper entrenched into everything. And that’s why neoliberalism is so difficult to pick apart.
Goldy:
It’s also, as you talk about in the book, this is a really difficult and complicated story to tell, this critique of neoliberalism, whereas neoliberalism itself is a very simple story.
Mehrsa Baradaran:
Yes. So there’s what neoliberalism says it is and what neoliberalism actually does. So when I start the book, you’re like, “Oh, here’s what the neoliberals say they’re doing.” But when you actually track it, I mean, as you see, I mean the book took me a long time to put together because I wanted to follow everything that neoliberalism did through every branch. So this is what it did in legislature, this is what it did in the agencies. And the agency bit is the biggest bit I would say.
And then there’s the courts. Let me just lay that out. There’s the courts, there’s agencies, there’s Congress. It’s not just this ideology that goes top down. It’s the way that neoliberalism gets into the very fulcrum of the scales of justice. When you go to court and you’re arguing your case, a judge you think is looking at the facts and trying to get at justice. But what neoliberalism does through training of judges, through the ideology of economics 101 and law and economics and Federalist Society, is to say to a judge that the way that you’re going to measure the scales of justice is toward a cost benefit analysis or what is the most efficient way-
Nick Hanauer:
Economic efficiency.
Mehrsa Baradaran:
Yes. So Posner says, “Efficiency is a proxy for justice. Justice is too hard and messy. It is inefficient,” says Richard Posner, “to go at justice because there’s just too much. So you must go at efficiency.” So all of a sudden you have efficiency and a cost benefit, and not just efficiency, whatever you think it is. Efficiency, the way that Pareto and-
Nick Hanauer:
Capital efficiency. Capital efficiency is what they mean.
Mehrsa Baradaran:
And Pareto efficiency, meaning that across the board, if the corporations gaining a million dollars and everyone else is only losing $20,000, but it’s their livelihood, it’s their insurance, it’s their farm, but the insurance company’s gaining a million, that’s Pareto efficient because it’s a net positive across all people. That’s the efficiency that then gets lodged into every agency decision on environmental, every agency decision on banking, everything. And so now you’ve embedded into the very scales of justice, a market logic in the same way that the witch trials would bring a woman and be like, “Well, if she floats, she’s a witch.”
Nick Hanauer:
She’s a witch. If she sinks, she’s fine.
Mehrsa Baradaran:
But if she doesn’t, fine. It’s that kind of justice, right?
Nick Hanauer:
Our bad.
Mehrsa Baradaran:
Yeah. Yeah. It’s that deep, the ideology, so you can’t get out of it. You are in their playing field. And so to argue against it is to have to actually deprogram or… And a lot of leftists end up being stuck and having to argue for environmental justice in the cost benefit analysis-
Nick Hanauer:
In that frame.
Mehrsa Baradaran:
In that frame.
Nick Hanauer:
You can’t win.
Mehrsa Baradaran:
… to say, “Okay, well, if you…” You can’t win. And that’s the thing is once they’ve had the arena and once they set the rules, you can’t win on their terms. Right?
Nick Hanauer:
Yeah. One of the things that’s driven us craziest is that any policy which directly benefits the majority of citizens has to affirmatively prove that it will do no harm.
Mehrsa Baradaran:
Yes, yes.
Nick Hanauer:
[inaudible 00:11:46] what happens to rich people, it’s fine.
Mehrsa Baradaran:
It’s not… Right. As though that’s not the basis of democracy, that it should benefit the majority of people. It is actually stacked now, and it’s very clear as you look, I mean the neoliberals, I mean, it’s really astounding when you actually go and read Friedman and Stieglitz. I mean, not Stieglitz.
Nick Hanauer:
Not Stieglitz.
Mehrsa Baradaran:
Stiegler, sorry.
Goldy:
And Becker.
Mehrsa Baradaran:
And Becker and Buchanan.
Nick Hanauer:
Buchanan.
Mehrsa Baradaran:
So I mean, first of all, they’re all just out-and-out racist. The way that they’re just like Black people, I mean inefficient market player. I mean, it’s so obvious what their motive is. It’s in the fifties. We’re talking about integration, we’re talking about expanding democracy. And so the second democracy tries to expand to bring in a new group of people, they’re like, “Forget democracy. Democracy is inefficient. Democracy is anti majoritarian.” This is Buchanan. Any taxation is theft of the minority and the real minority, the real oppressed per Lewis Powell, per Buchanan, per Friedman is the rich people. That’s the real victims of democracy.
And so they say it very clearly. It’s very clear what they’re onto. And so then to stretch it out, and then you have this ignorance of like, “No, well, this is about market efficiency.” Well, they didn’t say that. They said it’s about a minority losing out to majorities. So they’re very clear that this is anti democracy, and that’s if there’s any giveaway here, it’s like this is the opposite of democracy. Neoliberalism cloaks itself in freedom. But what they’re saying is democracy is bad for the elites and what’s good for the elites is good for everybody. So we should go for what’s efficient for elites, for everyone, and it’ll trickle down to you. Don’t worry about it.
Goldy:
Yeah, yeah. No, it’s interesting because in the book you point out, it’s not simply that this is in defense of the white majority. You talk about in the South, I think it was William F. Buckley, who basically out-and-out advocated for white minority rule in defense of civilization.
Mehrsa Baradaran:
Yes. And I say I think about Buckley, he’s one of the neoliberals that starts out in 1960 as an out-and-out racist. Segregation forever. Apartheid is good. Jim Crow is good. By the end of the sixties, is a full on neoliberal. Black capitalism and capitalism is good. So you see it… You can follow each individual. They start out saying in the 1960s, segregation forever-
Goldy:
What they believe.
Mehrsa Baradaran:
What they believe, and then they find a new way of saying it, which is Lee Atwater gave away the playbook. He’s like, “Oh, you’re saying things like states rights. You’re saying things like economic efficiency, but what you really mean is segregation forever.” That’s the whole thing.
Nick Hanauer:
We see this today with the Trump administration and their anti DEI stuff where you can’t use race as a measure for admissions to college. But now they’re saying you can’t use socioeconomic measures if that ends up benefiting Black people.
Mehrsa Baradaran:
Yes, yes. And so race and neoliberalism, this is kind of the point of my book, is to really bring in the racial story into neoliberalism. It’s two things. It’s one is the Civil Rights Movement really is the impetus for this neoliberal backlash. And also that race becomes, as it always is, not about the hatred in our hearts, but a really effective political weapon. How do you take away people’s rights? How do you break apart majorities is you give them racism. So Nixon does exactly what the Reconstruction Era, the way that Reconstruction fails is the Democrats in the South, instead of having all the sharecroppers join up against the cotton oligarchy. You’ve got white sharecroppers and Black sharecroppers.
The white Democrats in the south give white men the Klan and white supremacy so that they will join with them against their natural economic allies. Same thing that Nixon does. Same thing that Trump is doing. As soon as the inequality gets too large and too unsustainable, race becomes the most effective political weapon. And you can do trans. You can do any of the hot button issues. It’s like, why were the billionaires funding Charlie Kirk to go and do these wedge issues? Who’s funding that guy? I mean, look at the money. What do they want? They just want division. They don’t care what it is, whether it’s trans or race or whatever. And so this becomes a strike against class solidarity, essentially.
Nick Hanauer:
And one of the great things about your book for me is that it clarifies an idea. A lot of people have talked about that Trump being post neoliberal basically because he does tariffs, and that’s not neoliberal, but in fact, he’s totally neoliberal. It’s just an incoherent form of neoliberalism.
Mehrsa Baradaran:
I would say it’s neoliberalism in the 1960s, the way they started talking neoliberalism. When they were still talking, apartheid is good and the market should rule, that’s Trump again. Trump just took away the nuance. It’s like, why are we pussyfooting around the actual fact of this, right? And so Trump lays it out exactly as would Stiegler, who would say… Before he was saying things like inefficiency or whatever, he was writing op ed saying the Black people are inferior to white people, and then he becomes this very macroeconomic guy. But yes, it’s the same message. And Trump is… His policies are very much aligned with what… Even Hayek and them, they were very strong state power. Not tariffs necessarily at the time because they wanted capital flows. They wanted capital to be above democracy. But that cat is already out of the bag.
The point of the sixties was in the post-Bretton Woods era is you have all of these nations gaining statehood all at once. You have five European nations controlling every global south country, every resource. And all of a sudden empire goes away, that doctrine dies because the Nazis put it to full effect. And what do you have? You’ve got… Every nation has a vote. You can’t have that kind of democracy on the world stage and still have corporations looting the Middle East for oil, looting Chile for copper, looting South Africa for diamonds and gold. So you need a new ideology. And so capital has to become higher than democracy.
And that’s the pivot. That’s what happens in the seventies. And so now you’ve got just a capital world. The nation state’s been defunct, I think for a while. I think capital’s been running the world economy for a long time, and that’s neoliberalism. And so Trump is a very interesting neoliberal because he’s the original. He wants it back to where it was, where state power is… And I think that’s what… We’ll see. We’ll see whether any state power can actually defeat the power of capital. I think that’s the more interesting thing going forward.
Nick Hanauer:
Yeah. Interesting. Mehrsa, I am personally acquainted with many of the world’s most-
Goldy:
You trying to say it politely?
Nick Hanauer:
Yeah. I know-
Mehrsa Baradaran:
The fat cats.
Nick Hanauer:
… a of these people. Yeah, yeah, yeah. I know a lot of these people personally, and I think I can say pretty confidently, they are not racists. They’re sociopaths. They don’t care about anybody. They are equal opportunity exploiters, right?
Mehrsa Baradaran:
Yes.
Nick Hanauer:
They’ll steal from poor white people just as happily as poor Black people.
Goldy:
Let’s be fair, Nick. I mean, Elon Musk, it’s possible to be both a sociopath and a racist.
Mehrsa Baradaran:
He’s probably both, yeah. Elon Musk is probably both, yeah.
Nick Hanauer:
But Jeff Bezos is definitely not a racist.
Mehrsa Baradaran:
Sure, sure.
Nick Hanauer:
But he definitely feels fine exploiting anybody who can possibly exploit. This is a person who absolutely believes that if it’s good for Jeff Bezos, it’s good for the world. Full stop. Right?
Mehrsa Baradaran:
Full stop.
Nick Hanauer:
So I don’t doubt that a lot of the worst actors in academia were motivated by racism originally, but I think we’ve gone… We’ve transcended that somehow. Where capital… Again, capital looks for the easiest… No, sometimes brown people are easier to exploit than white people. Right? Can be true.
Mehrsa Baradaran:
Yeah. I don’t think race isn’t motivating it at all. I think race is one, a useful political weapon for… It’s just red meat for certain people, and it just constantly works in that way. But in the book, the first third of the book is why neoliberalism? Why that time? Why does this ideology become the successor ideology to empire? That’s the first part of the book. The second part of the book is the how, how it infiltrates into the law. And then the third part of the book is what happens when you’ve unleashed capital? And what happens is capital is its own algorithm. So there’s this story about AI, this nightmare story about the paper clips. I don’t know if you’ve heard of this. If you program an AI to create just paper clips, make it the most efficient way possible, and all of a sudden we’re all paper clips.
Our bodies are… The society is just… You don’t give it a stopping point and everything turns into paper clips. That’s how these AI algorithms work. And that’s like a dystopian future. But we’ve been in that since the 1980s. Once capital is unleashed above the nation state above anything else that is production or productivity or GDP or anything like that, capital must grow at least at 6%, but we’re in a world where capital must grow at 20%. How does capital grow in private equity firms and hedge funds at 20% year-on-year? What is at the other end? It’s debt, it’s exploitation. So capital has now just become a force. If there is a matrix, if there is an AI algorithm, we’re under, it’s capital itself. And so all these guys, Bezos and Elon. It’s hard to imagine a world where there aren’t individual villains. And that’s why this idea is so hard. It’s hard to understand ideologies the way they work, abstract ideas and concepts. But we live in that world. We live in a world of abstractions.
And abstractions like capital are the greatest forces motivating human behavior. And they run on their own… They have their own-
Nick Hanauer:
Logic.
Mehrsa Baradaran:
… gravity. Yes, and we’re part of it. We’re the paper clips in capital’s machine. And so at the end of the book, I just call the market, it’s like the big dumb machine, and it’s cannibalizing us. Our 401Ks are up in this massive pool of capital that is just expanding and expanding. It’s an unstoppable rate at this point. It’s just metastatic. And that’s what it is. It’s become metastatic because there’s nothing supporting it anymore. And so it’s just running on exploitation, debt, and extraction. And that’s the problem. And it’s not even efficient anymore. It is the zeros and ones are growing faster on these balance sheets than they can ever be put to productive use, than there is anything correlated in the real world to it. And that has to stop because that’s absolutely unsustainable. It’s absolutely unsustainable.
Nick Hanauer:
So you opened your book with an example, the PG&E example. Just we’ve been talking in abstractions, maybe tell that story.
Mehrsa Baradaran:
Yeah. So I was fascinated by Marjorie Taylor Green’s rise and the rise of these conspiracy theorists. And you look at the thing that got her on the national stage is this Facebook post that she wrote in 20… I think ’16 or ’18, I can’t remember the exact date, but it was after the Paradise Fires in California caused by PG&E had many charges of manslaughter. They are a utility that has a monopoly in California, but they’re private shareholder owned company. And so they owe to their shareholders absolute profits, but they’re a monopoly, so they have no competition on the ground. And so they kept causing these fires by not updating their equipment. They had a hundred-year-old poles that they were not updating because it’s less efficient-
Nick Hanauer:
Expensive.
Mehrsa Baradaran:
… to do that than… It’s expensive. And they had better ROI on lobbying or whatever they were using their money for. So this pole falls down, causes this fire, and Marjorie Taylor Greene, instead of saying, “Look at this PG&E structure,” she’s like, “Oh, Jewish space lasers, and it’s a Rothschilds and all the Democrats together in this conspiracy.” And if you are someone looking at this and don’t know all the facts and don’t have all the time to research it, you’re like, “Something smells fishy with what happened here.” And also, PG&E went quickly through bankruptcy because you can do that to extinguish all of your liabilities, just like the Sacklers did. Just like any company that can just pick their court in white planes. I know those lawyers, I worked with them at Davis Polk. We were famous for this, right? You can just take a company into bankruptcy, just wash it of its liabilities, and it comes out with the shares skyrocketing afterwards. So they did that with PG&E.
Goldy:
Thank God we can’t do that with student debt.
Mehrsa Baradaran:
Right. Oh, gosh. Yeah. Yeah. You would hate for the irresponsibility.
Goldy:
That is non-dischargeable.
Mehrsa Baradaran:
Exactly. Exactly. Exactly, exactly. So you are saying, “This smells fishy.” And she comes in and she says, “Here, I have these villains for you.” Rather than it’s a system. The villainy is in the system. It’s these ideologies, it’s these abstractions. And that’s why it’s so hard. But we have to be humans that can think in abstractions. I mean, we live in an AI world, not just the AI that they’re spouting, but we’ve been living in algorithmic demands. We are living in capital’s worlds right now. We are capital’s supply. We’re capital’s food. We’ve been capital’s food and capital is insatiable. There’s no stopping point to capital. It will make paper clips if that’s what it’s programmed to do unless democracy checks it. And what neoliberalism did is prevent democracy from ever checking capital’s absolute expansive growth.
And now that it’s metastatic, it’s a cancer into democracy itself. Try to regulate the banks. I was the nominee for the office of the Comptroller of the Currency in the Biden administration. The banks didn’t want me, and guess who they wanted? Nobody. We did not get a nominee for office of the Comptroller of the Currency. The person that regulates banks, the person that says how they can make money and upon whom’s backs, they can do it. So that was my insight. This book came out after that. And I put a little bit of it into the conclusion. But if we can’t regulate the banks, we don’t have a government, we don’t have a democracy anymore. So that’s why I’m very not optimistic about policy changes or political parties that can stop this thing. We really have to look at it as what it is, which is just an abstraction that we’re all under. We’re all under.
Goldy:
And to be clear, when you describe the market as an algorithm, it’s an algorithm for inequality, that’s not a metaphor. It is fact. Nick and I are working on a book, and in it, there’s a chapter on how… Well, can I use the word non-ergodic?
Nick Hanauer:
Non-ergodic, yeah.
Goldy:
Non-ergodic systems work. There’s a math to the market that unregulated by a democracy makes vast inequality inevitable. It’s just this interaction between luck compounding and path dependence. And the inevitable outcome is vast inequality. And that’s what we’ve been getting because we just let the market do its thing.
Mehrsa Baradaran:
There’s no other way. Yes, yes. I mean, Marx had it right saying, “Once you’ve created this abstraction called capital, everything is going to become modified.” And what you’ve seen in the last 10 years, so if you look at the commodification cycle, so first it’s land, that’s the original capital. The first capitalism, how it proceeds is it commodifies land. Land becomes property, then human beings become property, then time, your time and labor. So this is industrial revolution. Your working day becomes a commodity. Now we’re in your thoughts, your social circles. Capital is hungry and it needs more and more living things to stick into the woodchipper that creates profit and abstract profit on the other end. And so everything that we’ve put into the woodchipper, first the land itself, then human beings, then our time, now our minds, then our social circles, and now the AI future is our therapy, our psyches, our subconscious. It’s endlessly insatiable. There’s nothing it won’t commodify.
Goldy:
And importantly, capital is not this objective thing that exists in the real world. It is entirely a legal construct.
Mehrsa Baradaran:
It’s a legal abstraction. We have created it, and it has a life of its own, but that’s why it’s dangerous. The lily pond example, when you say, if a lily pad on a pond doubles every day, and it’s half the pond on the 49th day, what is it on the 50th day or something like that. I’m screwing it up, but it’s like the whole pot, right? And it’s hard for us to fathom that kind of growth because nothing in the natural world grows that fast. But capital does. Compound interest grows like that. And so we’ve created these abstract ideas that can grow beyond any human or natural limit.
So capital can grow faster than anything on this natural planet can grow. We’re so far beyond the natural cycles that we were supposed to be living in. I mean, I can add in here, part of capitalization, part of what we’ve done in subtraction is completely relegate indigenous wisdom, and this idea of living with the land, the let’s say, feminine concept of the market as exchange and as gift giving and as community has been… That’s like, you don’t understand markets if you’re talking about that stuff, right?
Goldy:
Yeah. We’re always told, I’m always told, I just don’t get the math. If I understood the math.
Mehrsa Baradaran:
Yes, but it’s about math, that the market’s about math. And I think you go back into the Silk Road and the market was very much about trust and innovation and all of the things that human beings create. So I’m not an anti-market people. I’m from the Middle East. We are market people. Our societies are very exchange driven, but it’s not capital. It is exchange. It is trust. It is innovation. There’s definitely some messiness and chaos to markets for sure. But a market is… You need money to measure how much rice for saffron, but not money that grows indefinitely in an abstract way into the future. So capital just introduces this new thing into humanity that has been ongoing and that has been sucking the lifeblood out of community and out of society for a long time. But it has reached absolute sort of metastatic rates at this point.
Nick Hanauer:
So what do we do? We’re in violent agreement with most of your thesis, with this caveat that markets do have a role in human societies. Markets are not efficient. Markets are an evolutionary system for generating new solutions to human problems. They work better than anything else ever devised. And if they’re well-structured, they can be for the good. But given where we are, what do we do to reel all this in?
Goldy:
Because you make the rather, I think, startling to some people claim near the end of the book that we don’t need to tear everything down.
Mehrsa Baradaran:
Let me clarify. I’m done asking the government for anything. I think the government… I think that is for people on the left, especially in the socialist-Marxist strain, it’s about government power. And I don’t think that that’s the right way, especially in that sort of just left-right spectrum. I don’t think that spectrum works. It’s defunct. I think we’re about us human beings versus capital. It’s human beings versus this abstract idea. And there are ways to do it. It’s actually, when you look at it quite easy, it just takes new stories. It just takes us routing our and putting it where it belongs, and then getting ourselves out of this money system, getting ourselves from under it to above it. If capital is a legal concept that is a bunch of human beings believe in, money is just about belief. The monetary system is just what we believe.
So it’s all of these ideas that are controlling us. All we need is new ideas. And that sounds really easy, but it’s tricky. The logistics aren’t hard. Listen, create a little hole in the stock market where we stick our 401Ks into, that is one share, one vote, no dilutions, no preferred shares, just one stock, one vote corporation. The US Constitution was based on a corporate charter. We could do it again, just disentangle money from voting power. One share, one vote. We stick our 401k in because that’s how the market gets us. My 401k is stuck into the war machine. When you look at what I’m invested in, and I had to do this as a nominee, it’s like Raytheon, Exxon, all this shit that I don’t want to be a successful industry when I’m retiring, but I can’t get out of it. So if we could get a vehicle to stick our 401Ks in, get a couple billionaires to put money in, and start actually investing in the things that we want.
So what are the things that we want? I want the weapons manufacturers. I want Raytheon, I want Halliburton. Get enough money, get the leverage, and get the weapons out. And then we can start talking. I think it’s really just a few industries that got into the law that bent the law to their favor. And this is where it gets actually easy when you look at it in the abstractions. It’s oil and gas. It was tobacco and pharmaceuticals, but that’s less powerful. But it’s weapons. Weapons control… It’s what Eisenhower said when he was leaving office is still true. It’s a military industrial complex. And at this point, it’s just money. And if it’s just money, we can coordinate and buy it. And I think we can prove that it’s way more profitable, more efficient, more life-giving for all of us if we do not have a war economy.
I think this is where my next work is, is money and war are so tied in together that they need each other. And war is the destructive engine that’s crushing us. And it is tied in. You can’t have the US dollar without the war machine. And I don’t think that means that we have to give up on modernity. And I think that’s the lie also that we have to give it up. That’s what I’m saying. You don’t have to tear it apart. We don’t have to go back to foraging. We have modern structure. We saw during COVID how much the world can change. We saw the supply chains. We saw how interconnected we are in a world. And so I think this is the pivot we’re at as a humanity. We’re either one world who breathes together, eats together, uses resources in an efficient way that feed and clothe and house all of us, because there are no scarcities. There are only scarcities of ideas.
There’s no natural scarcities. This was the promise of the sixties. We either do this as one globe or we nuke ourselves to death. And we’re still at that cusp. We’ve been delayed 50 years. Can we do it or are we on the path to nuke ourselves to death? And I don’t know. I don’t know if we make it. My bet is that we do, but it’s going to take some new ideas and new stories. And it really is about back into the spiritual, what we were talking about how neoliberalism lives in us. I think writing this book was actually a deprogramming of myself the way that we think in neoliberalism-
Goldy:
[inaudible 00:36:12], our writing has been deprogramming.
Mehrsa Baradaran:
Yeah. You have to decolonize your mind. You have to de-patriarchy, de-neoliberal yourself and get free of it, and then we can start talking.
Goldy:
Right, right. It’s funny because I was just writing something where I talk about how hard it is even for us not to think and speak in terms of it’s metaphors.
Mehrsa Baradaran:
Yes, exactly. Yes, yes. So new ideas, but it’s not that new. We can go back. We had many societies, and this is also the lie of the neoliberals, is like the idea of progress. We were all savages who killed each other until civilization became less violence. This is Steven Pinker. We’re so much less violent now. Are you kidding me? Do you know anything about ancient societies? There were societies that lived without violence for thousands of years in this continent, on that continent. And we have records of them. We can do it. We’ve done it as a humanity, and we must not be blinded by these abstractions that have us thinking that there’s no alternative. I mean, this is Margaret Thatcher. There’s no alternative. There are. There are many alternatives, and we’ve done them.
Nick Hanauer:
Interesting. Couple of final questions. If you could wave your magic wand, I’d love for you to point to a policy rather than a vibe. The vibe I get, but it’s not that useful.
Mehrsa Baradaran:
Literally… I mean, like I said, okay, again, I’m not asking Congress for anything. We can’t get there. I’ve tried. We’ve tried. I mean, think about the money involved, but we create a little shareholder corporation thing, put it on the stock market. It’s super easy. Ask people to put their money the way that crypto does it, right? But actually one share, one vote, whatever. The structure is easy. And then we go after industries that are blocking. So like I said, weapons. We invest in poverty reduction. We invest in inner cities. We buy up the Lower East Side of Manhattan and create from the ground up profits for that corporation. We create what we want to see in the world.
We create the world that we want to see through money. If money controls it from the top, why not use money to control it from the bottom? The eventual goal is to get out of this money system. This money system is in… All of those myths about war and hierarchy are embedded in this money system. So I think this money system has to break. I think it’s going to break one way or another, this dollar supremacy, this empire kind of money system. And so I’m saying let’s break it from the inside and give options for coming out of it. I don’t see a way out without the whole… It’s got to be a holistic change, but there’s many ways to do it.
Goldy:
So you’re suggesting public equity firms instead of private equity?
Mehrsa Baradaran:
Yes, public, but yes, but not through government, through actual public, through human to human. Do we all agree with this structure? How much am I willing to invest of my own money into this world? And looking at crypto, and obviously very much, this is bad, bad, bad because it’s rooted in neoliberalism in itself, but looking at the buy-in of something like GameStop. That had a 50 billion… How many people would be willing to invest into an alternative market than this one? A lot more people than you’d assume. People are sick of it.
We just don’t have a way out because we’ve been told that there’s no way out. Give people a new story, give people somewhere to put their money and their time and their talents, and they would take it. Something that would feed them, something that would be in the community. So I think it’s both. It’s one is getting the abstractions right, getting the corporate structures. And then there’s the other is building community where we sit, actually figuring out to go back to those small scale food and housing and all of that stuff, and making sure that everyone gets what they need.
Nick Hanauer:
And one final question. Why do you do this work?
Mehrsa Baradaran:
I was born under bombs. I was born in 1978 in Iran, and it was the start of the revolution and the eight-year war between Iran and Iraq and my research… I didn’t realize this, but all my research was headed to trying to figure out why what happened happened. And the answer is that that was a war started for money. There was no reason for Iran and Iraq to be fighting for eight years with millions of dead, with fascism in both countries. I was born with men with guns, bodies hanging in the street. My mom was in prison for three years, and that was neoliberalism. Neoliberalism fed the Shah billions of dollars because the Neoliberals wanted Iran’s oil.
And then the revolution happened because Iranians didn’t want to be oppressed. And then the right wing got fed by Reagan this time, weapons on one side, weapons on the other side. Why? Because Halliburton needed profits and there was no natural wars going on. And so they had to manufacture a war. Since 1978, there’s been manufactured wars for money. I’ve been, unbeknownst to me, this was subconscious until recently, following the money to figure out why what happened to me happened to me. I think you can take it on down. And all of us have been harmed by these ideologies individually, psychically, spiritually, emotionally.
Nick Hanauer:
That’s fascinating. Well, thank you so much for being with us. This has been a terrific conversation.
Mehrsa Baradaran:
Thank you so much for having me. Yeah, I really appreciate it.
Nick Hanauer:
Best of luck on your endeavors. Can’t wait to have you back for your next book.
Mehrsa Baradaran:
And thank you for doing this. I really appreciate this whole podcast, everything that you’re doing.
Nick Hanauer:
So what a fun conversation that was, Goldy. A little bit all over the place.
Goldy:
I love that. That’s the kind of conversations I love.
Nick Hanauer:
Exactly. Exactly. Sorry, listeners. Must be annoying if you’re a listener, but super fun for us. It’s so fun sometimes to talk to somebody who has been on the same sort of personal journey that we’ve been on. That conversation we had at the top about how neoliberalism, it just permeates everything. It is the air we breathe, the water we swim in.
Goldy:
The stories we tell ourselves to interpret the world and our place within it.
Nick Hanauer:
The metaphors we use. Everything. Everything, everything, everything.
Goldy:
And in our introduction, Nick, you mentioned that she was aligned with us, but approached it a little differently. And the way I’d sum that up from our conversation is we have always thought about neoclassical economics, economic orthodoxy as the foundation on which this neoliberal ideology is built. But I think what Mehrsa is telling us is that neoliberalism is the foundation. That ideology is the foundation. And explicitly, she said this, neoclassical economics is just the skin it wears to justify itself.
Nick Hanauer:
Yes. You know what? And I’m sure that’s true, right? And neoliberalism in that sense is this perpetual permanent desire on the part of elites in every society-
Goldy:
The rich and the powerful.
Nick Hanauer:
… to maintain their power and wealth, and to expand it.
Goldy:
And you can see it historically because she mentioned some of the… Almost all of them, I think, Nobel Prize winners, Hayek Friedman, Becker, Stieglitz, Buchanan.
Nick Hanauer:
Not Stieglitz, not Stieglitz, not our friend Joe Stieglitz.
Goldy:
I’m sorry. Stiegler. Stiegler. I did the same mistake she did.
Nick Hanauer:
We apologize again, Joe.
Goldy:
Hey. Right. Stiegler. Profound racists who then modified the way they talked about things so that they basically didn’t sound as racist. They clothed their racism in math, in economics eventually.
Nick Hanauer:
But just to be clear, even if it wasn’t racism, it was a worm of elitism. You don’t have to be a racist to be a shithead.
Goldy:
But they were all racist.
Nick Hanauer:
Okay, maybe. Okay.
Goldy:
I mean, read their words. They were…
Nick Hanauer:
I’m not denying that. I’m just saying that the problem is bigger than racism.
Goldy:
But the point I was getting at-
Nick Hanauer:
There are neoliberals in Nigeria and everybody’s Black. They’re just as exploitive.
Goldy:
It’s possible. It’s possible to be neoliberal without being racist. But I think what’s important, the point I was getting that is that if you look at the history of neoclassical economics of its rise over the past 75 years to the dominant orthodoxy, its founders were the founders of neoliberalism. And if they weren’t, they were deeply shaped by neoliberalism. That neoclassical economics, as it has evolved into this highly-mathematized theoretical construct, there’s a strong argument to say that neoliberalism predates it, and it came out of neoliberalism as an effort to justify the beliefs of neoliberalism. So it’s that idea that she has, that it’s neoliberalism as the foundation, maybe she’s right and we got it backwards.
Maybe it doesn’t matter because in an evolutionary system, in a reflexive system, these things just influence each other. Again, there’s other places, of course, where she’s very aligned with us, the idea that it’s about stories and that the way to fix this is to tell new stories. That is something we’ve been saying for a long time. It’s just again, and she says it in the book, their story is really simple. It’s a very simple and compelling and easy to tell story.
And our side has not come up with an equally simple and compelling story because somehow we feel… Our people tend to feel constrained by facts and logic as opposed to the best stories are just assertions. They are, after all just stories. And it may sound cynical, but sometimes the truth and facts are not always the same things. And sometimes you don’t need facts to back up the truth.
Nick Hanauer:
No, it’s true, true.
Goldy:
And we just need to worry more about telling effective stories than ones that we can cite, have academic citations to support the arguments we’re making.
Nick Hanauer:
Yeah. Interesting conversation.
Goldy:
If you want to read more from Mehrsa, of course, we will provide a link in the show notes to her book, The Quiet Coup: Neoliberalism and The Looting of America. We encourage you to read it. You can buy it at your local independent bookstore. You can take it out of the library, and if you have to, if it’s what’s most convenient, you can of course purchase it from that giant online monopolist.
Freddy:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate, and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram, and Threads @pitchforkeconomics. Nick’s on Facebook as well, @NickHanauer.
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