In an idle moment I was reading through the Stanford Encyclopedia of Philosophy, as one does, I came across this paragraph from Kevin Vallier’s entry on neoliberalism:
Take privatisation for example. While in some cases privatisation did introduce competition (and therefore the idea of a competitive market), others did not. The water industry, for example, remains very close to the economist’s definition of a natural monopoly where competition is impossible. There is no market where different firms compete to sell consumers water, but just a single provider that sends out bills every quarter, which is exactly what happened when water companies were publicly owned.
What a privatised water industry introduces that a nationalised water industry does not have is profit maximisation designed to provide dividends to shareholders. So neoliberals will extol the virtues of profit maximisation as ensuring efficient production. It sounds like using economics to justify privatisation, but again it’s selective. In a monopoly a profit maximising firm will set prices too high, and for the same reason may invest too little. That is why privatisation is typically coupled with an industry regulator, but regulatory agencies can easily be captured, so the net effect on efficiency of privatisation is unclear. So privatisation of natural monopolies is not about creating markets, or using economics in an impartial way, but instead selectively applying particular economic ideas to create new private capital.
Another aspect of neoliberalism in practice, reducing taxes on the wealthy, is even more interesting in this respect. Again, this has nothing to do with markets, but involves the selective use of bits of economics to pursue political ends. The standard justification for reducing taxes is that it increases incentives to supply labour, but that applies to the worker on the shop floor as much as the CEO. Both are ‘wealth creators’. To use economic jargon, all taxes are distortionary (reduce efficiency), not just those on high incomes.
This example is particularly interesting because, as Vallier notes, what is called ‘trickle down economics’ is not part of the neoliberalism of Hayek or Friedman. Nor is it obviously in the interests of corporations or companies as entities, because lower top rate taxes do not help increase profits. Indeed one theory about why CEO pay is so high is that it is the result of low top rate taxes (see here), and high CEO pay represents a (small) deduction from profits.
The distinction between capital (in the form of companies or corporations) and the wealthy (CEOs or shareholders) may seem pedantic, but I would argue it becomes central to the development of neoliberalism. Although some on the left like to call the governments of Johnson or Trump neoliberal, they are not like the neoliberalism of Thatcher or Reagan. Thatcher helped create the EU’s single market because this benefited UK capital involved in international trade, but Johnson by promoting Brexit did the opposite, because he was backed by very wealthy individuals (especially newspaper owners) who had their own individual interest in leaving the EU. Free trade and free movement of labour benefits capital, but Trump attacked both.
Ironically I think you can use arguments often associated with Buchanan to explain this apparent paradox. Buchanan wanted to suggest that the state would not be able to successfully correct market failures because of the incentives individual politicians faced would lead them to depart from the public interest. But in principle the same can happen to politicians who start off wanting to promote the interests of capital, but find the incentives they face (through donations from wealthy individuals or pressure from newspaper owners) lead them to promote policies that act against the interests of capital. It is why some neoliberals could pretend to themselves that Brexit was a good idea by imagining that labour or environmental regulations were more onerous to firms in general than the red tape associated with trade under Brexit. It was nonsense, but the incentives they faced pushed them in that direction.
Even if I have convinced you that academic economics can be a very effective tool for critiquing ideologies such as neoliberalism , this has an obvious downside, which is that academic economics can in turn be influenced by, and in some cases distorted by, ideologies. How do those outside academic economics know to what extent this continues in academic economics today? What stops ideology permanently influencing academic economics is evidence. Economics in academia, more now than perhaps ever before, is an evidence based discipline. So it is appropriate that in assessing the influence of ideology on mainstream academic economics we look at the evidence.
As I have already mentioned, Friedman’s arguments against Keynesian fine tuning never had widespread academic support, and have very little now. Across the globe central banks move interest rates month by month in an attempt to regulate the business cycle.  As I have also noted, many academics study market failure. Another example was austerity, which was opposed by the majority of academics, a majority that came close to a consensus as the evidence came in. On the left, many economists in the 60s and 70s argued maintaining very low unemployment was essential, and prices and incomes policies should be used to contain inflation. Once again, evidence was not on their side, and that approach lost favour among economists.
A response I often get when I make these arguments is why do we hear so much from economists that support right wing policies. The answer to that is straightforward: just look at who controls the means of information. Few people would argue that medicine was ideologically biased because we heard so many medics in the media arguing against lockdowns. Equally the media chooses among academic economists based on the ideas they want to see promoted, and not on whether they represent the academic consensus, as Brexit clearly showed.
 That critique is unlikely to be complete, as economic theory has its limitations, such as its focus on individual behaviour.
 The New Classical Counter Revolution was a more successful attack on Keynesian policy, for reasons I discussed here. It too proved temporary.
 An efficient outcome is pareto optimal, which means no individual’s position can be improved without harming someone else. Pareto optimal allocations can also be very unfair.
 Needless to say it can also do the same for left wing ideologies.
 This is fine tuning aggregate demand. The fact that central banks use interest rates while the Keynesians of post-WWII period used fiscal policy is, in my view, of secondary importance here.