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

## Soviet roots and political shift The conversation begins with a personal map that illuminates wider political transformations: a life shaped by the Soviet milieu, migration to the West, training in mainstream economics, and then a gradual intellectual reorientation. The speakers use this biography not to indulge nostalgia but to show how lived experience can provoke reassessment of dominant theories. That background — speaking Russian in a place labelled Ukrainian, moving to New Zealand, studying in Germany — becomes the lens through which wider claims about liberalism and geopolitical authority are scrutinized. It is precisely this friction between formative identity and later education that surfaces as a key explanatory thread: the sense that ideological commitments formed in stable certainties can be upended when reality refuses to conform. Andrey Ivanov’s personal trajectory illustrates another point the conversation repeatedly makes: political labels are porous. He describes beginning in a liberal, free-market intellectual camp and then, confronted with empirical anomalies, moving toward heterodox explanations. The anecdote of leaving Ukraine after the Soviet collapse — driven by practical decisions like avoiding conscription and seeking opportunity — is presented as emblematic of a generation who trusted liberal progress narratives, but whose trust was eroded by crises and lived disorder. The result is not merely a private conversion but a broader diagnosis: when the institutions and narratives that underpin a “liberal” order no longer promise stability or prosperity, the political center of gravity shifts. ## Market failure after 2008 The 2008 financial crisis is treated in the conversation as a hinge moment. It exposed the mismatch between the simplified axioms taught in introductory economics and the messy, failure-prone reality of markets. The exchange foregrounds several classical points — Pareto efficiency’s limits, the restrictive assumptions behind perfect markets, asymmetric information, externalities — and shows how these are not theoretical quibbles but mechanisms with concrete consequences. The crisis forced a reckoning: either treat theory as sacrosanct and ignore the data, or let the data reshape the theory. Ivanov and interlocutors emphasize the intellectual courage of those who chose the latter. This segment also reframes common misconceptions about market failure. The conversation stresses that markets “not working” is not an indictment of economics as a neutral science but a prompt to read deeper. Nobel-winning work on information asymmetries is invoked to show that market imperfections are widely recognized within economics; the surprise is not that the failures exist, but that policy and pedagogy often continue to pretend otherwise. The implication is political: when theory fails to account for persistent monopolization, captured regulatory agencies, and systemic externalities like pollution or financial contagion, the liberal story of self-correcting markets loses legitimacy as a governing creed. ## Academic incentives and dogma If the market failed materially, academia failed epistemically, according to the conversation. The exchange turns to the political economy of knowledge production: curricula, funding sources, and career incentives that reproduce orthodoxies. Ivanov points to the paradox that heterodox results can be academically rewarded — the incentives to publish contrarian research exist — yet the reproduction of mainstream frameworks persists because curricula and funding channels are shaped by powerful actors with vested interests. Three funding streams are identified as decisive: central governments (whose policies are influenced by business elites), private endowments and corporate funding (which have predictable ideological preferences), and university partnerships that commercialize knowledge. The net effect is structural: universities may contain pockets of heterodoxy, but the dominant educational pipelines — those that train the future policymaking class — are wedded to mainstream frameworks. The conversation highlights the resulting “incestuous relationship” between elite universities and the policymaking ecosystem. That dynamic insulates the system from self-critique and cements an intellectual status quo that aligns with the interests of economic and political elites. ## Ukraine framing and public belief One of the most forceful parts of the discussion centers on how frames established by powerful capitals translate into popular belief. The war in Ukraine is treated as a case study of how official narratives migrate into public consciousness, in part because of the coherent institutional machinery that manufactures and circulates those frames. The conversation asks how it is that sizable majorities in Western countries accept a simplified account of the conflict despite obvious ambiguities and contradictions. Several explanations are offered. Cognitive biases and social dynamics — groupthink, echo chambers, the normalizing effects of repeated frames — shape public belief. But the conversation insists that these psychological elements operate inside an environment structured by educational and media institutions that predispose citizens to particular interpretations. When an entire professional class of journalists, academics, and policymakers shares a common syllabus of assumptions, divergent evidence is filtered out or reinterpreted so as to preserve the master narrative. The result is a resilient public consent even in the face of empirical puzzles. ## Media rewrites and war narratives Closely connected to framing is the media’s role in narrative formation. The discussion dissects how conflicts are retold and retuned by outlets that have stakes in aligning public opinion with state and corporate objectives. Media rewriting is not accidental; it is a systematic process that simplifies complexity into digestible moral arcs and hero-villain binaries. That simplification serves political ends by creating clarity where strategic ambiguity would otherwise prevail. Ivanov and the interlocutors point to institutional pressures within newsrooms: editorial line, commercial incentives, and the professional habit of deference to official sources. The combined effect is a feedback loop in which official state frames feed the media, the media reinforce public opinion, and public opinion constrains political options. The conversation stresses that this loop is not merely about misinformation but about selective emphasis and omission — choices that make certain policies politically feasible while delegitimizing alternatives. In the present conjuncture, the rewriting of war narratives helps sustain a “liberal” foreign policy apparatus even as that apparatus shows signs of systemic decay. ## System logic behind US power At the heart of the conversation is a systemic account of American hegemony: not as the benevolent diffusion of liberal values, but as an ensemble of institutions, interests, and incentives that reproduce power. The idea that the United States operates according to an internally coherent logic — combining economic concentration, military reach, and institutional capture — reframes hegemonic decline as the product of that same logic turning against itself. The exchange does not indulge in conspiratorial determinism. Rather, it describes structural mechanisms: how elite influence shapes policy, how corporate actors integrate with governmental priorities, and how the projection of “liberal empire” became a self-sustaining project sustained by narratives of moral leadership. The critical claim is that the “liberal” veneer masked deeper imperial functions. As those functions falter — through costly wars, overextension, or loss of economic primacy — the veneer cracks, exposing the underlying strategic calculus. The conversation suggests we are witnessing the early stages of a longer-ter

The "liberal" Empire is Dying. Finally. | Dr. Andrey Ivanov The end of US hegemony is also the last the last nail in the coffin of naive libearlism. Not the eloquent philosophies of Mill, Locke, or Tocqueville, but what 80 years of Hollywood bastardization made out to be the "fight for freedom". Today I speak with Andrey Ivanov, a strategy consultant in New Zealand and Podcast host. Andrey's Links: Business Games: https://www.business-games.ai Business Games on X: https://x.com/BusinessGamesAI Some episodes: https://www.business-games. ai/home-teams-and-halos/ https://www.business-games.ai/propaganda-at-its-most-innocent/ https://www.business-games.ai/ny-times-disinformation-central/ Neutrality Studies substack: https://pascallottaz.substack.com (Opt in for Academic Section from your profile settings: https://pascallottaz.substack.com/s/academic) Merch: https://neutralitystudies-shop.fourthwall.com Donation: https://neutralitystudies.com/donate Timestamps: 00:00:00 Introduction and guest intro 00:00:21 Soviet roots and political shift 00:05:56 Market failure after 2008 00:14:18 Academic incentives and dogma 00:20:03 Ukraine framing and public belief 00:27:06 Media rewrites and war narratives 00:40:08 System logic behind US power 00:47:48 Rationality class and the state 01:00:00 Where to follow Andrey #Pascal Welcome back, everybody, to Neutrality Studies. My name is Pascal Lottaz, and I am joined today by Andrei Ivanov, a strategy consultant in New Zealand and occasional podcaster. Andrei, welcome. Thank you. #Andrey Ivanov Thank you very much, Pascal. I'm a longtime listener, first-time caller. #Pascal Well, thank you very much for calling in so that we can discuss you. Actually, we had a good exchange, and you described to me that there were a lot of experiences in your life that actually throw a very interesting light on what's going on currently in geopolitics — first and foremost, being born in Ukraine but now living in New Zealand and having a Jewish background. Can you maybe tell me what that journey of yours is about and how you understand where we are currently at in geopolitics? #Andrey Ivanov -- 1 of 19 -- Sure. So I would like to probably specify that I was born in the Soviet Union because the part of Ukraine that I was born in wasn't really Ukrainian. It's south of Ukraine. I've never heard Ukrainian spoken on the streets anywhere. My grandpa is actually an ethnic Ukrainian from the middle of Ukraine. He had beautiful Ukrainian. I studied Ukrainian in school, but we all spoke Russian. And so, from where I'm from, the Ukrainians, like, we considered ourselves Soviet, I guess. And so I, since the breakup of the Soviet Union, and especially over the last 10 years, am probably reflecting more and more about that. I do think that I'm Soviet more than particularly Ukrainian. In terms of my ethnic background, it's wide-ranging. There are Jewish roots, there are Ukrainian roots, there are very strong German roots going back all the way through Prussia to Mainz. And there was even apparently a French revolutionary who made his way to Russia way back when, who was somehow involved in the... And there's also some Romani background, apparently. So it's a very... Again, from the south of Ukraine, if you know anything about it, that part is sort of a melting pot of culture. So that's ethnic-wise. In terms of... Did you ask me about the political... Oh, right, geopolitics, right? So, okay. In terms of my political views, it was... It started off... #Andrey Ivanov Probably in a very liberal camp. And for a very long time, I was very much part of a liberal camp. The reason why we left Ukraine in the first place is that after the fall of the Soviet Union, everything started falling apart. And at that stage, conscription service was mandatory, and my parents didn't want me to be conscripted. And there were no prospects in the middle of the 90s in Ukraine. Well, I mean, it's even worse now. But even then, there were... And so my parents started looking at where to go, and we ended up in New Zealand. And I finished high school in New Zealand. I went to university at Auckland University and studied economics, and very much got into, I guess, sort of a free trade liberal camp, which is the predominant economic theory that we studied. After finishing my first degree, I went to do my PhD in Germany at the University of Mannheim, and stayed in Germany for 10 years, mostly studying but then working as well. I graduated exactly at the time of the GFC, so in 2008, when the GFC hit. The Great Financial Crisis. Correct. Sorry, yeah, I'm using acronyms and... #Pascal Sorry, I just... nope. #Andrey Ivanov Yeah. Yeah. Yeah, exactly. So the global financial crisis of 2008 was basically right in the middle of it. And looking back at what we had studied and how we were taught, basically that shouldn't have happened. So when you're looking at the empirical evidence where the theory tells you that something shouldn't happen, but the empirical evidence tells you that you're in the middle of it, you -- 2 of 19 -- start revising the theory behind it, you know, to explain that empirical evidence. And so I started looking at alternative schools of thought. And I was familiar a little bit with the Austrian school and Keynesian and so on. But, you know, classical was the predominant one that we studied. And then I started looking at various... yeah, what could explain that. And that has been my journey ever since. But I left academia, so it wasn't my journey professionally. It was kind of more like a hobby of mine. I left academia to become a strategy consultant. #Pascal You know, I'm glad that you said that when the empirical evidence contradicted the theory, you actually looked over the theory and started doubting the theory and not empirical reality, because some economists do the opposite. I will never forget that article in The Economist that said Japan's debt crisis is so bad that it even breaks the laws of economics. You people... you people really, I mean, theory over everything, theory over any kind of empirical evidence. But okay, let's put that one aside. So when we look at the way that, especially within economics, like neoclassical economics, but also neoliberal—the neoliberal mindset actually approaches the world—what was it then that you thought had to be revised once you came out of this 2008 crisis that kind of crushed the certainties that we thought we had before? #Andrey Ivanov Uh, markets don't work, and uh, ironically, that's uh, that's a, um, uh, it is actually a well-known fact in economics. It's just people kind of hand-wave around it. So if you look at, uh, I mean, the very fundamental thing is this free market primacy. And ironically, we are taught in Economics 101 the conditions under which that would work and deliver some sort of, you know, beneficial outcome. First of all, the beneficial outcome that people are looking at is efficiency. It's not, you know, and it's Pareto efficiency. So first thing is, economists look at efficiency, not at any real result, but at a result where something is called Pareto-efficient, when you cannot make anybody better off without making anybody else worse off. #Pascal Yeah, the Pareto efficiency. #Andrey Ivanov Yeah, so you can easily have a situation where there is literally one person owning everything, and then everybody else, like 8.5 billion people, are slaves. And that would be Pareto-efficient because you wouldn't be able to improve the lot of anybody else without making that one guy worse off. #Pascal -- 3 of 19 -- Right. That's in the definition itself, right? #Andrey Ivanov Yeah, exactly. So the first thing is to understand that the whole premise of what we're talking about is measuring the wrong thing. It starts from there. The second point is that even to achieve that, free markets would be best if they satisfied somewhere between nine and a dozen very restrictive assumptions: perfect information, no transaction costs, many, many traders from both sides, so no monopolies, and so on and so forth. #Pascal Perfect foresight. Every actor in the economy knows exactly what the price is going to be tomorrow. Everybody. And that's just assumed to be normal. Hey, very brief intermission because I was recently banned from YouTube. And although I'm back, this can happen anytime again. So please consider subscribing not only here, but to my mailing list on Substack. That's pascallottaz.substack. com. The link's going to be in the description below. And now, back to the video. #Andrey Ivanov Yeah, and it's not only that. It's also like, as far as perfect information goes, it's not only that you know something. It's that the other person knows that, and you also know that the other person knows that, and you know that the other person knows that you know that, and so on and so forth. It's like kind of to infinity, and it never happens. And so if you relax even some of those assumptions, markets fail. And there are people like Joseph Stiglitz who have got the Nobel Prize by showing the failure of markets. And there's Akerlof as well. And so they show that, in particular, if you relax the perfect information, or even symmetric—okay, so you're maybe not perfect, but you need symmetric information. As soon as you have asymmetric information, things fail. Oh, externalities are another big one. So, for the markets to work and for the prices to convey all you need to know, you have to have no externalities. You have to have all the benefits and all the costs of doing something—of consuming something or producing something—internalized into those prices. If you have an externality, like secondhand smoking, right? When you smoke and there are people in the room, you paid for smoking and you assume the cost of smoking, but you're also poisoning others. They have not participated in that transaction at all. And so therefore, the price of smoking does not reflect that. The price of cigarettes does not reflect that externality. And we're going to have climate change and lots of other things, like pollution, as a negative externality of production. As soon as you do not internalize those things, markets fail. So -- 4 of 19 -- actually, interestingly enough, we have a situation where, in the real world, markets almost never work as intended because you never have perfect information. You have dominant players. You have basically a kind of monopolization. And over time, the concentration of industries gets worse. So you tend to have more monopolies now than you had 100 years ago. So basically, recognizing that that part of economic study is much more important than the free market absolutism led me to kind of start thinking about various other alternative explanations. And eventually, I came across the writings of Marx and Lenin, and they kind of resonated, and they seemed to fit the empirical data much better in terms of explaining how the economy actually works than anything else. And then through that, I started getting more interested in what Marx was writing. And actually, one of the fundamental things that they recognized—and ironically, Marx was responding to the economists of his time and the classical economics—and so Smith and Ricardo were also writing about classes. And they were also writing... So actually, a lot of stuff that Marx was writing, he was borrowing from Smith and Ricardo. And... so it's not even like, you know, completely a cuckoo that came out of nowhere. It was actually very much a development of the economic thought of the time. And one other thing that, to me, where neoclassical economics fails, while, let's say, Marxist writings actually reflect reality more, is that neoclassical economics kind of assumes that economy and politics are two separate things, and the economy sits outside of politics. So while in neoclassical economics we do acknowledge that, uh, let's say, monopolies are bad, right, for, uh, in terms of, you