The liberal Empire is Dying. Finally. | Dr. Andrey Ivanov

ELI5/TLDR

A Soviet-born, New Zealand-based economist walks Pascal Lottaz through how he migrated from textbook free-market liberal to Marxist after 2008 broke his economics degree. The thesis: the liberal world order isn’t malfunctioning, it’s working exactly as designed — for a small class of owners. Calling US foreign policy “irrational” only makes sense if you assume the US government is supposed to serve average Americans. It isn’t. Once you swap that liberal frame for a class-based one, things like the Ukraine war, the Iran strikes, lobbying, and Western media obedience stop looking like bugs and start looking like features.

The Full Story

From free-trade poster boy to apostate

Andrey Ivanov was born in southern Ukraine in the late Soviet era, raised speaking Russian, identifies more as Soviet than Ukrainian. His family fled the post-Soviet collapse for New Zealand, where he picked up a standard neoclassical economics degree at Auckland, then a PhD at Mannheim. He graduated into the 2008 financial crisis — an event that, by the textbooks he had just memorised, was not supposed to happen.

That was the crack. He started reading what he wasn’t taught: Stiglitz, Akerlof, eventually Marx and Lenin. The pattern was always the same — heterodox economists could publish papers showing the standard model failed, but the standard model still ran the curriculum, the central banks, and the policy pipeline. Why? Because, Ivanov argues, universities are funded by governments captured by business elites, by wealthy donors, and by corporate partnerships. Nobody pays a chair to teach Marxism. The students who go on to write policy are the ones trained inside the dogma.

Why Econ 101 doesn’t describe Earth

Ivanov spends a long stretch demolishing the foundations of free-market economics in plain language. The textbook claim is that markets produce efficient outcomes. But “efficient” here means Pareto efficient — a state where you can’t make anyone better off without making someone worse off. As he points out, a world where one person owns everything and 8.5 billion people are slaves is Pareto efficient. The metric measures the wrong thing.

Even on its own terms, the model only works under nine to twelve assumptions that never hold in real life: perfect information, no transaction costs, no monopolies, no externalities, perfect foresight. Relax any one of them and the prediction collapses. Yet the model is still taught as gospel.

The deeper problem is the firewall economists draw between economics and politics. Standard theory admits monopolies are bad, then waves them off with: “the regulator will fix it.” But the regulator sits in a political system that the monopolists fund. He cites the 2014 Gilens and Page study from Princeton — the one that ran the numbers and found that economic elites and business interest groups have substantial impact on US policy, while average citizens have “little or no independent influence.” That isn’t a glitch in democracy. That’s the system.

The propaganda that doesn’t know it’s propaganda

The Soviet Union had Pravda, and everyone knew Pravda was Pravda. You read it sideways to figure out what the Politburo wanted you to think. Western propaganda, Ivanov argues, is more dangerous because it’s sincere. The journalists believe what they’re saying. The editors believe they’re being objective. The selection happens earlier — in who gets hired, who gets promoted, who gets airtime.

He gives a concrete example. In early February 2022, the New York Times ran a piece warning that Ukrainian nationalists were a threat to Ukrainian politicians who wanted to avoid war. A month later, after the Russian invasion, the same paper was tweeting that Ukrainian neo-Nazis were “a figment of Russia’s imagination.” Both can’t be true. He spent six to nine months effectively full-time tracking these shifts in respectable Western media — work most people don’t have the time or emotional bandwidth to do, which is exactly why partisan shorthand wins.

He also recycles a story about Chomsky being asked by a senior editor whether he really thought journalists were lying. Chomsky’s reply, paraphrased: I think you genuinely believe what you’re saying. But you wouldn’t be sitting in that chair if you held any other view. The selection is the propaganda.

Trump as symptom, not cause

This is the part where Ivanov pushes back hardest on the standard “rationalist” foreign policy framing — the one Mearsheimer uses, the one most Western pundits assume. The framing says: Trump is irrational, the Iran strikes are irrational, the Ukraine policy is irrational, because none of these things serve American interests.

Ivanov flips the question. Whose interests? The definition of rationality from economics is: maximising your own subjective benefit given your information. Are American policymakers maximising their benefit? Absolutely. They get rich, they get re-elected, they get speaking gigs and book deals, they never face war crime prosecution. Obama bombed about as many countries as Trump and gets celebrated. Pelosi’s stock portfolio outperforms Buffett. The state isn’t failing the average American — the state isn’t for the average American.

So Trump isn’t a bug. The system was always going to produce a Trump, or someone like him. The Iran strikes weren’t a sudden decision — they’re the end of a multi-decade preparation. The post-1991 escalation in US adventurism wasn’t a change in personnel or values; it was just the removal of a counterweight (the Soviet Union) that used to make the rules of engagement matter.

The Marxist frame as operating system

Lottaz frames this as a software stack. The visible UI is the daily news. Below that, foreign policy doctrine. Below that, capitalism’s need for resources and markets. Below that, the kernel — class struggle. Ivanov agrees with the framing.

In the liberal view, the state is a neutral arbiter — Locke’s social contract, the umpire of rights and property. In the Marxist view, the state is a repressive tool used by one class against another. Ivanov asks which view better fits what you actually see: ICE raids, Ukrainian conscription, the EU shifting power from member states to Brussels because business interests find supranational bodies more useful, the funnelling of poor Ukrainians into a meat grinder while contracts flow to defence firms.

He extends the analysis to imperialism. The standard story is that empires extract resources. Ivanov argues the more important function is securing markets — forcing the colony to buy the metropole’s goods at the metropole’s prices. New Zealand had preferential agreements with British technology firms. India was a captive market. When modern states get in the way of that, the corporate solution is to build supranational structures — like the EU — that route around national governments.

Key Takeaways

2008 is the rosetta stone for a generation of economists who left the orthodoxy. If your model says the crisis can’t happen and you’re standing in the crisis, you change the model.
Markets only deliver “efficient” outcomes under assumptions that never hold. Pareto efficiency is also a deliberately weak bar — a one-owner slave economy passes it.
The neoclassical firewall between economics and politics is the load-bearing lie. Once you accept that regulators are captured, the whole “markets plus democracy” story falls apart.
Western propaganda’s strength is sincerity. The selection happens at hiring, not at the editorial meeting.
“America’s foreign policy is irrational” is a category error. It’s rational for the people making it. They get the upside, not the downside.
The state, viewed as a class instrument rather than a neutral arbiter, predicts ICE, Ukrainian conscription, EU centralisation, and Black Rock’s regulatory capture more parsimoniously than the liberal alternative.
Imperialism is at least as much about market access as about resource extraction.

Claude’s Take

This is a long conversation between two men who already agree, and that’s worth flagging up front. Lottaz runs a channel called Neutrality Studies which is, by reputation, anything but neutral on these questions — it sits firmly in the camp that sees Western foreign policy as the primary global problem. Ivanov is a smart, articulate guest who arrives at conclusions Lottaz already holds. The result is a low-friction dialogue with no real opposition.

That said, the strongest stretches are when Ivanov stays close to economics. The Pareto efficiency demolition, the catalogue of unrealistic neoclassical assumptions, the Gilens and Page citation — these are not fringe arguments. They are mainstream critiques that happen to never make it into the undergrad curriculum, which is itself part of his point. If you’ve ever wondered why economics feels like a closed loop, his “follow the funding” answer is reasonable.

Where the conversation gets shakier is in the application to specific conflicts. The claim that “the Western side lies more” about Ukraine, after six to nine months of the speaker’s own investigation, is a confident conclusion drawn from one person’s research project. The selective use of polls (the Gallup language self-selection example, the unpublished 2009 NGO study about 63% of Ukrainians wanting to join Russia) is the kind of evidence that lands hard if you already believe the thesis and slides off if you don’t. The unpublished study in particular is unverifiable — it’s a friend-of-a-friend anecdote presented as fact.

The Marxist frame does have real explanatory power. It is genuinely strange that “America’s foreign policy is irrational” is the dominant Western analysis, when the simpler explanation is that policymakers are doing what benefits policymakers. That’s not a left-wing insight, it’s a public choice insight, and you can arrive at it from libertarian or Marxist starting points. Ivanov’s contribution is to take it seriously and apply it consistently.

But class analysis, like any single-frame theory, can flatten things that don’t deserve flattening. Putin gets called a liberal. The EU gets reduced to “business interests routing around states.” Trump becomes inevitable. When everything fits the theory, you should get suspicious — that’s exactly the move Ivanov accuses neoclassical economists of making.

Score: 6. The economics critique is solid and worth absorbing. The geopolitics is one-sided enough that you should listen to the other camp before you let it settle.