Supply Side Economics Part 3: The Market Fundamentalism Feedback Loop

The Market Fundamentalism Feedback Loop

In the first two parts of this blog series, I argued that supply-side economics is theoretically and empirically weak, then examined why the ideology nevertheless persists among the public. This post takes a somewhat more rigorous approach.

I have also alluded to the way supply-side economics is commonly paired with austerity policies. We previously introduced market fundamentalism: the extension of neoliberal market ideology into broader areas of social and political life. For the purposes of this post, I will treat these concepts as equivalent and construct a system-dynamics model that captures some of the causal forces introduced in the previous installment.

Contents

• 1. The infrastructure behind market fundamentalism
  • The ideological package
  • Atlas Network and State Policy Network
  • Funding architecture
• 2. How the network produces and distributes influence
  • Network building and organizational replication
  • Expertise and policy production
  • Multi-channel diffusion
  • Cultural and institutional diffusion
• 3. From network to feedback system
  • Two reinforcing mechanisms
  • Epistemic closure and self-reinforcement
  • Scale and reach
• 4. Core variables in the model
• 5. Reinforcing loops (the “engine” of propagation)
  • R1 – Wealth → funding → policy → more wealth
  • R2 – Network growth and ideological diffusion
  • R3 – Career incentives and intellectual supply
  • R4 – Narrative–identity–media loop
  • R5 – Global policy diffusion loop
• 6. Balancing loops (countervailing forces and potential failure modes)
  • B1 – Empirical reality and policy failure
  • B2 – Credibility and scandal loop
  • B3 – Regulation and transparency loop
  • B4 – Institutional capture → institutional collapse
• 7. Other causal influences
• 8. References

1. The infrastructure behind market fundamentalism

We begin with the Atlas Network¹ and the State Policy Network (SPN)², two organizations that function, in effect, as “think tanks for think tanks.” They serve as hubs in a wider network and provide infrastructure for market fundamentalism—not only around narrow tax policy, but also around austerity, neoliberal “reforms,” climate inaction, and libertarian culture-war issues.

Rather than merely producing arguments themselves, these organizations help create and support other organizations by providing instruction, training, funding, and networking. The result is an infrastructure for propagating the same broad ideological package across many institutions and policy domains.

The ideological package

Across the Atlas ecosystem and related conservative and libertarian think tanks, the same bundle of ideas appears repeatedly:

• Supply-side economics – tax cuts, deregulation, labor “flexibility,” privatization framed as growth engines.
• Austerity & “fiscal responsibility” – spending caps, balanced-budget rules, welfare and pension cuts, often in the middle of downturns.
• Neoliberal structural reforms – privatizing utilities and pensions, trade and capital account liberalization, independent central banks plus weakened unions and social protections.
• Climate inaction / environmental skepticism – from full denial to “delay/derail” strategies that oppose binding regulations.³
• Libertarian cultural politics – anti-union, school vouchers/charters, “parental choice,” anti-DEI, anti-ESG, hostility to public health mandates, etc.

Atlas Network and State Policy Network

Atlas Network describes its mission as supporting “classically liberal” and “pro-freedom” organizations worldwide and helping them learn how to “win the battle for hearts and minds” on free markets and small government.¹ In practice, this extends market fundamentalism beyond conventional economic policy into areas such as pensions, schools, environmental regulation, and culture.

Atlas is a meta-network. Founded in 1981, it now claims ~580–590 partner organizations in 100+ countries.¹ Its budget is around $24–28M per year, including $7–8M in grants to partners, while roughly 4,000 people are trained annually through Atlas Network Academy in fundraising, marketing, leadership, and campaign tactics.¹

Atlas describes itself as a connector—a “think tank that creates think tanks”—providing seed grants, training, and networking to pro-market organizations around the world.¹ Recent research by Vucetic (2024), “Atlas Asunder?,” treats Atlas as a global neoliberal thought network. Analyzing dozens of partner organizations’ outputs from 2017–22, the study finds that they prioritize “free market” causes and often view rising radical-right movements as tactical allies rather than threats.⁴

Investigative work by Lee Fang has also described Atlas-linked think tanks as deeply involved in Latin American politics, including the training of activists and politicians associated with austerity and privatization agendas and campaigns against left governments in Brazil, Argentina, Bolivia, and elsewhere.⁵

In the United States, the State Policy Network (SPN) mirrors Atlas at the state level. Formed in 1992 as an outgrowth of Heritage-inspired state groups, it now has 65+ member think tanks across all 50 states, along with hundreds of affiliates.² Its stated mission is to advance “market-oriented public policy solutions” and “limited government” at the state level.²

SPN generates roughly $25–27M per year in revenue, in addition to tens of millions in combined revenues among affiliates.² It is closely linked to ALEC, which develops model state legislation, and to major national advocacy organizations such as Americans for Prosperity and Americans for Tax Reform.²

SPN affiliates promote state tax cuts and spending caps, welfare cuts and Medicaid rollbacks, school vouchers, attacks on unions framed as “workplace freedom,” and deregulation in energy, environmental, and labor policy.² Hertel-Fernandez’s State Capture argues that SPN, ALEC, and Koch-linked groups have reengineered state policy regimes in ways that entrench neoliberal and anti-labor rules.²

Funding architecture

Three broad funding patterns recur across this infrastructure:

Funding pattern	Core description	Examples and channels
1	Billionaire and corporate families and foundations: Jane Mayer’s Dark Money documents a core set of right-wing billionaire families whose foundations built this infrastructure: Koch, Scaife (Mellon heir), Bradley, Olin, Coors, DeVos, etc.6	The Koch network seeded Cato and heavily funded Americans for Prosperity, AEI, and other organizations.7 Scaife gave roughly $23M to Heritage and was previously the largest single donor to AEI.8 Bradley and other funders support SPN and state-level groups.2
2	Donor-advised “dark money” conduits: A substantial share of funding flows through DonorsTrust and Donors Capital Fund, donor-advised funds explicitly marketed as a “dark money ATM for the conservative movement.”9 In 2024, DonorsTrust alone granted about $195M to more than 300 right-wing influence groups, litigation centers, media outlets, and climate deniers.10	Investigations show DonorsTrust and Donors Capital funneling tens or hundreds of millions into SPN affiliates, climate-denial and “free-market” think tanks, and right-wing media outlets.11
3	Fossil-fuel and tobacco money: The role of conservative think tanks in climate and tobacco policy is heavily documented. Robert Brulle’s funding analysis calls these conservative foundations and front groups the core organizational base of the climate denial movement.12	Atlas itself received funding from Koch-affiliated groups, the ExxonMobil Foundation, and the tobacco industry in earlier decades; many partners were funded by tobacco companies in the 1990s–2000s and acted to oppose tobacco control.1 Dunlap and McCright and others show fossil-fuel-funded think tanks (Heritage, Cato, Heartland, etc.) as central nodes in the climate denial countermovement.3

2. How the network produces and distributes influence

Network building and organizational replication

From a systems and network perspective, Atlas, SPN, and related organizations function as central hubs in a multilayered graph. Their role is not limited to funding ideas: they also manufacture organizations by seeding and scaling new nodes—the logic behind the phrase “a think tank that creates think tanks.” Grants of a few thousand dollars, combined with training and organizational support, can help launch new think tanks, especially in the Global South, including organizations in Peru, Africa, and Eastern Europe.¹

These new nodes import both a shared ideological template—free markets and anti-statism—and a shared organizational playbook built around policy papers, op-eds, index reports, and media outreach. In network terms, this resembles scale-free network growth: a small number of highly connected hubs such as Atlas, SPN, and Koch-related funds accumulate links to many peripheral but ideologically aligned nodes.

Atlas explicitly operates Atlas Network Academy and regional Liberty Forums, where partners receive training in fundraising, marketing, leadership, media engagement, grassroots organizing, and the framing of policy disputes as moral conflicts such as freedom versus statism.¹ ABC News has described partners as being trained to “win the battle for hearts and minds.” The activity, in other words, extends well beyond the production of white papers into political communication.¹

SPN plays a similar role at the state level, offering training intended to help member think tanks operate more like coordinated business franchises while remaining aligned around school choice, tax cuts, union weakening, and deregulation.²

Expertise and policy production

Conservative think tanks produce what might be called “policy-based evidence” in several forms: short studies supporting tax cuts, deregulation, privatization, and austerity; freedom and economic-freedom indices that encode neoliberal metrics and penalize countries or states with larger public sectors; and climate-skeptic books and reports that manufacture uncertainty about scientific findings.

Dunlap and colleagues identify a strong connection between conservative think tanks and 108 climate-change-denial books, arguing that these publications are important vehicles for attacking mainstream climate science.¹³ Boussalis and coauthors similarly find that the volume of climate-contrarian content from conservative think tanks has grown sharply, while the messaging has shifted from questioning whether climate change is real toward arguing that policy responses are harmful—a shift consistent with strategies of delaying or weakening regulation.¹⁴

Multi-channel diffusion

Information diffuses through several channels—media, politics, movement organizations, and direct communication with the public.

The first is the think tank → media channel: op-eds, press releases, policy briefings, and readily available “experts” who can be quoted by journalists working on deadline, especially within ideological media ecosystems.

A second channel runs from think tanks → politicians and staffers. It includes model legislation, such as bills circulated through ALEC and SPN, as well as policy blueprints such as Heritage’s Mandate for Leadership and Project 2025.⁹

A third channel connects think tanks → movement organizations and influencers. This includes training activists such as the Free Brazil Movement, Latin American youth organizations, and Tea Party or AFP activists,⁵ as well as supplying talking points and “studies” to pastors, YouTubers, and movement media.

Finally, there is the think tank → public channel, in which organizations communicate directly through branded concepts such as “Tax Freedom Day,” “economic freedom” rankings, and “welfare dependency” narratives that become part of popular political vocabulary. From a systems perspective, think tanks therefore operate as information hubs with high betweenness centrality: they sit between billionaire donors, politicians, media organizations, and grassroots supporters, shaping the “expert knowledge” that flows among them.

Cultural and institutional diffusion

Market fundamentalism also spreads beyond the narrowly economic domain and into culture and public institutions. McCright, Dunlap, and others describe conservative think tanks as a “denial machine” that transforms a narrower economic skepticism of regulation into full-spectrum environmental skepticism encompassing climate, pollution, and environmental health, often reframed in libertarian language about property rights.³

Atlas has historically helped partner think tanks oppose tobacco controls and, later, vape regulation by aligning corporate interests with generic rhetoric about freedom, consumer choice, and the “nanny state.”¹ Climate-denial messaging has also diffused transnationally, moving from U.S. think tanks to the United Kingdom, Canada, Australia, New Zealand, and beyond through networks such as Atlas and SPN.¹⁵

The same logic appears in other policy areas. SPN and Atlas partners promote school vouchers and charters as “choice,” thereby marketizing education;² healthcare privatization and opposition to Medicaid expansion as a market approach to health;² and attacks on unions and collective bargaining as “workplace freedom.”²

Anti-DEI and anti-ESG campaigns are similarly reframed as efforts to “protect shareholders” or “keep politics out of business.” This is what Wendy Brown describes as neoliberalism as a political rationality: schools, families, democracy, and identity are increasingly reframed in market terms such as competition, choice, and human capital, with think tanks acting as important engineers of that reframing.

3. From network to feedback system

Two reinforcing mechanisms

Mechanism	Sequence
Wealth → influence → policy → more wealth	From a systems-dynamics perspective, the first mechanism is a classic positive feedback loop: wealth → influence → policy → more wealth. Wealthy donors and corporations fund think tanks and networks; those organizations design and promote policies that increase returns to capital, including tax cuts, deregulation, and weakened labor or environmental rules; those policies further concentrate wealth among the same elites; and the resulting wealth increases the capacity to fund and expand the network.
Narrative → belief → support → capacity	The second mechanism runs through narrative and social reinforcement: narrative → belief → support → capacity. Think tanks generate claims such as “tax cuts grow the economy,” “regulation kills jobs,” or “climate policies hurt the poor.” Those narratives spread through media, churches, schools, and activist networks, shaping public and elite beliefs. Believers then donate, vote, and consume aligned media, increasing both demand for think-tank content and the political clout of aligned politicians. Publicized victories—“we defeated X bill” or “we elected Y”—can further strengthen credibility and in-group loyalty, producing still more support and narrative production.

Epistemic closure and self-reinforcement

Over time, these mechanisms can produce epistemic closure. Within the movement’s information network, in-network “experts” such as Heritage, AEI, and Atlas partners become trusted authorities, while critical scholarship is dismissed as partisan or “globalist.” This is the “apologetics” dynamic noted earlier: the reasoning becomes conclusion-first, community-reinforced, and increasingly self-sealing.

Several structural features help keep the system relatively closed to outside influence:

• Donor anonymity (via DonorsTrust, etc.) breaks the accountability loop between source and public; you see the message, not the money.¹¹
• Network density and homophily: Atlas/SPN affiliates mostly cross-reference each other, invite each other to conferences, and publicize each others’ work, increasing perceived “consensus” within the bubble.¹
• Parallel media ecosystem: when your “experts” appear constantly on Fox, talk radio, YouTube, aligned newspapers, there is little incentive for your audience to ever check what, say, the IMF or mainstream econ journals are saying.

In systems terms, this creates a self-reinforcing attractor: once funders, think tanks, politicians, activists, or citizens enter the basin, a combination of incentives and identity can keep them circulating within it even when external evidence conflicts with the core beliefs.

Scale and reach

The scale of the network is broad. A few indicators illustrate its reach:

• Atlas: ~580–590 partner organizations in 100+ countries; multi-million-dollar grant-making and thousands trained annually (we will look at map plots of this later).¹
• SPN: at least one affiliate in each U.S. state; combined revenues of network orgs in the tens of millions; active on tax, labor, education, welfare, environment.²
• DonorsTrust / Donors Capital: almost $200M in 2024 alone to 300+ right-wing groups; tens of millions annually for more than a decade prior.¹⁰
• Climate denial: conservative think-tank climate output has grown rapidly, and think-tank-linked denial books form a key spine of the global denial movement.¹⁴

Latin America offers a particularly concrete example. Investigations describe Atlas-affiliated think tanks as helping shape party platforms, advise ministers, and coordinate campaigns against left governments using imported “free-market,” anti-corruption, and anti-statist narratives.⁵ The broader point is that this infrastructure is not marginal; it operates as a globalized ideological supply chain.

With that background in place, we can now build the systems-dynamics model. The next sections define the main variables and then trace the reinforcing (R) and balancing (B) loops through which supply-side and market-fundamentalist ideas spread across think-tank networks such as Atlas, SPN, and the broader Heritage/AEI orbit.

4. Core variables in the model

The model is organized into four layers:

Layer	Variable	Meaning and examples
Resources and structure	Wealth of economic elites (WEALTH)	—
Resources and structure	Donor funding to ideological networks (FUNDING)	—
Resources and structure	Think tank network size/density (NETWORK_DENSITY)	—
Resources and structure	Think tank capacity (TT_CAP)	staff, communications, research, training
Resources and structure	Movement infrastructure (INFRA)	conferences, training programs, legal organizations, media outlets
Information and narratives	Market-fundamentalist content volume (MF_CONTENT)	papers, op-eds, television appearances, social posts
Information and narratives	Perceived expert consensus on markets (PERCEIVED_CONSENSUS)	—
Information and narratives	Media amplification (MEDIA_AMP)	how often these organizations appear as “experts”
Information and narratives	Resonant narratives / frames (NARRATIVE_APPEAL)	“tax cuts create growth,” “regulation = socialism,” “freedom vs nanny state,” etc.
Beliefs and politics	Public belief in market fundamentalism (PUBLIC_BELIEF)	—
Beliefs and politics	Elite belief / policy preferences (ELITE_BELIEF)	among politicians, judges, high-level bureaucrats
Beliefs and politics	Political power of aligned actors (POLITICAL_POWER)	seats, committee chairs, appointments
Beliefs and politics	Policy adoption of supply-side/neoliberal reforms (POLICY_ADOPTION)	—
Outcomes and feedback	Inequality / wealth concentration (INEQUALITY)	—
Outcomes and feedback	Regulatory capacity & state legitimacy (STATE_CAPACITY)	quality of public institutions, enforcement, social trust
Outcomes and feedback	Policy performance (POLICY_PERFORMANCE)	growth, stability, crises, social indicators
Outcomes and feedback	Counter-movement strength (COUNTER_MVT)	unions, progressive think tanks, and climate/justice organizations
Outcomes and feedback	Systemic shocks (SHOCKS)	crises that visibly contradict the narrative (financial crashes, climate disasters, pandemics)

These variables can now be connected into the reinforcing and balancing loops that make up the model.

5. Reinforcing loops (the “engine” of propagation)

R1 – Wealth → funding → policy → more wealth

The classic plutocratic growth loop.

Step	Causal relationship	Mechanism and explanation
1	WEALTH (+) → FUNDING	More concentrated wealth among economic elites creates more surplus resources that can be directed into Atlas-, SPN-, and Heritage-type networks.
2	FUNDING (+) → TT_CAP & INFRA	More funding supports additional staff, stronger communications teams, more training programs, and more organizational spin-offs, including new think tanks, front groups, and student organizations.
3	TT_CAP & INFRA (+) → MF_CONTENT	Greater capacity and infrastructure support a higher volume of reports, op-eds, “indexes,” YouTube content, training sessions, and school curricula.
4	MF_CONTENT (+) → MEDIA_AMP & PERCEIVED_CONSENSUS	Journalists and platforms operating under time pressure can repeatedly turn to readily available “experts.” Repetition across many separately branded organizations can create the illusion of a broad expert consensus around market fundamentalism.
5	MEDIA_AMP & PERCEIVED_CONSENSUS (+) → ELITE_BELIEF & PUBLIC_BELIEF	Politicians, judges, and voters may internalize the idea that “everyone knows” tax cuts and deregulation are the route to growth and freedom.
6	ELITE_BELIEF (+) → POLITICAL_POWER & POLICY_ADOPTION	Market-fundamentalist elites win elections, staff agencies, and implement supply-side, austerity, privatization, and deregulatory policies.
7	POLICY_ADOPTION (+) → INEQUALITY & WEALTH	These policies can increase profits, asset prices, and top-end incomes, further concentrating WEALTH among the same class that funds the network.
8	INEQUALITY (+) → WEALTH	Greater inequality concentrates more wealth that can be converted into political resources, feeding back into FUNDING.

Loop summary

WEALTH → FUNDING → TT_CAP → MF_CONTENT → BELIEFS → POLICY → WEALTH

Figure 1. Core political economy loop (R1). The central engine connects wealth, funding, think-tank capacity, content production, belief, policy, and renewed wealth concentration.

flowchart TD %% R1 – Core wealth–funding–policy loop w_wealth["Wealth of economic elites"] f_funding["Funding to ideological networks (R1 → R2, R3)"] tt_cap["Think tank capacity & policy infrastructure"] mf_content["Market-fundamentalist content"] media_amp["Media amplification"] perc_cons["Perceived expert consensus"] elite_belief["Elite belief in market fundamentalism"] public_belief["Public belief in market fundamentalism"] pol_power["Political power of aligned actors"] policy_adopt["Adoption of supply-side / neoliberal policies (R1 → B1–B4)"] inequality["Inequality & wealth concentration"] w_wealth -->|+| f_funding f_funding -->|+| tt_cap tt_cap -->|+| mf_content mf_content -->|+| media_amp media_amp -->|+| perc_cons perc_cons -->|+| elite_belief media_amp -->|+| public_belief elite_belief -->|+| pol_power public_belief -->|+| pol_power pol_power -->|+| policy_adopt policy_adopt -->|+| inequality inequality -->|+| w_wealth

R2 – Network growth and ideological diffusion

The Atlas/SPN “think tank that creates think tanks” loop.

Step	Causal relationship	Mechanism and explanation
1	FUNDING (+) → NETWORK_DENSITY & INFRA	Atlas and SPN use funding to seed new think tanks, train staff, and convene regional forums.
2	NETWORK_DENSITY (+) → MF_CONTENT & MEDIA_AMP	More nodes produce more reports and more locally situated “experts.” When journalists and officials encounter different organizational brands repeating similar ideas, PERCEIVED_CONSENSUS can strengthen.
3	NETWORK_DENSITY (+) → NARRATIVE_APPEAL	The same frames—for example, “Tax Freedom Day,” “economic freedom index,” and “school choice”—can be localized and culturally adapted, increasing their resonance.
4	NARRATIVE_APPEAL (+) → PUBLIC_BELIEF & ELITE_BELIEF	Greater narrative appeal strengthens both public and elite belief.
5	BELIEFS (+) → DEMAND for aligned think tanks	A more receptive audience makes it easier to recruit young staff, politicians, and donors into the network.
6	DEMAND (+) → FUNDING & NETWORK_DENSITY	When donors see visible “impact”—media hits, policy victories, or social-media traction—they may become more willing to fund expansion and organizational spin-offs.

Loop summary

FUNDING → NETWORK_DENSITY → MF_CONTENT → BELIEFS → DEMAND → FUNDING

Atlas and SPN are organizationally well suited to reinforce this loop because their funding, training, and network-building functions all expand the number and reach of aligned organizations.

R3 – Career incentives and intellectual supply

Why the system produces a steady supply of “experts.”

Step	Causal relationship	Mechanism and explanation
1	TT_CAP & INFRA (+) → CAREER_OPPORTUNITIES_IN_MOVEMENT	The infrastructure creates fellowships, think-tank jobs, media opportunities, speaking circuits, consulting work, and political appointments.
2	CAREER_OPPORTUNITIES (+) → SUPPLY_OF_INTELLECTUALS & SPOKESPEOPLE	Ambitious people, including PhDs, can see a viable career path within the ideological ecosystem.
3	SUPPLY_OF_INTELLECTUALS (+) → MF_CONTENT & APPARENT SOPHISTICATION	More intellectual and media personnel generate additional white papers, models, “studies,” and polished public performances, making the movement appear more intellectually substantial.
4	APPARENT SOPHISTICATION (+) → PERCEIVED_CONSENSUS & ELITE_BELIEF	The more institutionally “serious” the movement appears, the easier it becomes for elites to cite and rely on its work.
5	ELITE_BELIEF (+) → POLICY_ADOPTION → DONOR_SATISFACTION → FUNDING	Policy adoption can satisfy donors and encourage further funding.
6	FUNDING (+) → TT_CAP & INFRA	Additional funding replenishes think-tank capacity and movement infrastructure.

Loop summary

TT_CAP → CAREER_OPPORTUNITIES → INTELLECTUAL_SUPPLY → MF_CONTENT → LEGITIMACY → FUNDING → TT_CAP

This parallels an “apologetics industrial complex”: the system rewards people who can produce apparently evidentiary support for conclusions that are already ideologically fixed.

Figure 2. Careers & “expertise” loop (R3). The loop shows how organizational resources create career paths that expand the supply of aligned experts and, in turn, reinforce legitimacy and funding.

flowchart TD %% R3 – Career incentives and 'expert' supply f_funding["Funding to ideological networks (from R1)"] tt_cap["Think tank capacity (from R1)"] career_opps["Career opportunities in movement (jobs, fellowships, media gigs, political posts)"] intel_supply["Supply of sympathetic 'experts' & spokespeople"] mf_content["Market-fundamentalist content (to R1, R2, R4)"] apparent_soph["Apparent sophistication (models, indices, citations)"] perc_cons["Perceived expert consensus (from R1)"] elite_belief["Elite belief (from R1)"] f_funding -->|+| tt_cap tt_cap -->|+| career_opps career_opps -->|+| intel_supply intel_supply -->|+| mf_content intel_supply -->|+| apparent_soph apparent_soph -->|+| perc_cons perc_cons -->|+| elite_belief elite_belief -->|+| f_funding

R4 – Narrative–identity–media loop

How ideas become embedded in identity and culture.

Step	Causal relationship	Mechanism and explanation
1	MF_CONTENT & NARRATIVE_APPEAL (+) → IDENTITY_ALIGNMENT	Messages are framed as “American values,” “Christian values,” “patriotism,” “freedom,” or “anti-communism,” making belief a matter of identity rather than opinion alone.
2	IDENTITY_ALIGNMENT (+) → MEDIA_DEMAND & AUDIENCE_LOYALTY	Audiences seek media that affirms their identity, including Fox, talk radio, YouTube channels, and newsletters.
3	MEDIA_DEMAND (+) → MEDIA_AMP	Media outlets have incentives to amplify think-tank content when it resonates with audiences and drives engagement.
4	MEDIA_AMP (+) → MF_CONTENT_VISIBILITY	Greater media amplification increases the visibility of market-fundamentalist content.
5	VISIBILITY (+) → IDENTITY_ALIGNMENT & PUBLIC_BELIEF	That visibility feeds back into identity alignment and public belief, reinforcing the cycle.

Loop summary

MF_CONTENT → IDENTITY → MEDIA_DEMAND → MEDIA_AMP → MF_CONTENT (visibility)

The result is a tighter epistemic bubble: changing one’s mind can begin to threaten identity and group membership rather than merely altering a policy opinion.

Figure 3. Identity & media loop (R4). The loop shows how ideological content becomes tied to identity, increasing demand for aligned media and further amplifying the content.

flowchart TD %% R4 – Identity, media, and culture mf_content["Market-fundamentalist content (from R1, R2, R3)"] narrative_appeal["Narrative appeal ('freedom', 'anti-socialism', 'Christian free enterprise')"] identity_align["Identity alignment (patriotism, religion, tribe)"] media_demand["Demand for aligned media content"] media_amp["Media amplification (from R1)"] public_belief["Public belief (to R1, from R1)"] mf_content -->|+| narrative_appeal narrative_appeal -->|+| identity_align identity_align -->|+| media_demand media_demand -->|+| media_amp media_amp -->|+| mf_content identity_align -->|+| public_belief

R5 – Global policy diffusion loop

How Atlas-style networks export neoliberal policy scripts across countries.

Step	Causal relationship	Mechanism and explanation
1	NETWORK_DENSITY (global) (+) → POLICY_TEMPLATE_AVAILABILITY	Network growth makes prepackaged reforms more readily available, including voucher laws, pension privatization, deregulation scripts, and “economic freedom” benchmarking.
2	POLICY_TEMPLATE_AVAILABILITY (+) → POLICY_ADOPTION in multiple countries	Adoption becomes more likely when international lenders, trade bodies, or regional elites are already oriented toward similar reforms.
3	POLICY_ADOPTION (+) → SUCCESS_STORIES (or at least narratives of success)	Adopted policies can then be packaged as “success stories”—for example, “Look at Chile / Estonia / Georgia / [X] after our reforms!”—whether or not the full evidence supports the narrative.
4	SUCCESS_STORIES (+) → NARRATIVE_APPEAL & ELITE_BELIEF elsewhere	Success stories can strengthen narrative appeal and elite belief elsewhere.
5	ELITE_BELIEF (+) → DEMAND for Atlas/SPN-style think tanks in new countries	Stronger elite belief can increase demand for Atlas/SPN-style organizations in new countries.
6	DEMAND (+) → FUNDING & NETWORK_DENSITY	That demand can expand both funding and network density.

Loop summary

NETWORK_DENSITY → POLICY_TEMPLATES → POLICY_ADOPTION → SUCCESS_STORIES → BELIEF → DEMAND → NETWORK_DENSITY

This mechanism helps explain why similar policy packages and talking points can appear in countries with otherwise very different political and cultural contexts.

Figure 4. Network growth & global diffusion (R2 + R5). This combines organizational replication with the international circulation of policy templates and narratives of success.

flowchart TD %% R2 & R5 – Network growth and global diffusion f_funding["Funding to ideological networks (from R1)"] net_density["Network density of think tanks (Atlas, SPN, etc.)"] infra["Movement infrastructure (conferences, training, legal shops)"] mf_content["Market-fundamentalist content (to R1, R3, R4)"] narrative_appeal["Narrative appeal ('freedom', 'tax relief', 'choice')"] public_belief["Public belief (from R1, to R1)"] elite_belief["Elite belief (from R1, to R1)"] demand_thinktanks["Demand for aligned think tanks"] pol_templates["Policy templates & reform toolkits"] policy_adopt["Policy adoption (from R1, to B-loops)"] success_stories["Market-fundamentalist 'success stories'"] %% R2 – network growth f_funding -->|+| net_density f_funding -->|+| infra net_density -->|+| mf_content infra -->|+| mf_content net_density -->|+| narrative_appeal mf_content -->|+| narrative_appeal narrative_appeal -->|+| public_belief public_belief -->|+| demand_thinktanks elite_belief -->|+| demand_thinktanks demand_thinktanks -->|+| f_funding %% R5 – global diffusion net_density -->|+| pol_templates pol_templates -->|+| policy_adopt policy_adopt -->|+| success_stories success_stories -->|+| narrative_appeal success_stories -->|+| elite_belief elite_belief -->|+| demand_thinktanks

6. Balancing loops (countervailing forces and potential failure modes)

Even powerful ideological systems face countervailing forces. These balancing loops (B) can slow, constrain, or reverse the expansion of market fundamentalism.

B1 – Empirical reality and policy failure

Step	Causal relationship	Mechanism and explanation
1	POLICY_ADOPTION (extreme supply-side/austerity) (−) → POLICY_PERFORMANCE	Extreme policy adoption can contribute to deep inequality, fiscal crises, financial crashes, deteriorating public services, and visible climate harms.
2	POLICY_PERFORMANCE (−) → STATE_LEGITIMACY & PUBLIC_BELIEF	As people experience precarity, crises, and state failure, both state legitimacy and belief in the governing ideology can weaken.
3	Poor PERFORMANCE (+) → SHOCKS & CRITICAL_PUBLIC_DEBATE	Poor outcomes can generate visible shocks and critical public debate.
4	SHOCKS & DEBATE (+) → COUNTER_MVT & CRITICAL_SCHOLARSHIP visibility	Those shocks and debates can create an opening for progressive think tanks, unions, climate and justice movements, and heterodox economists to gain an audience.
5	COUNTER_MVT (+) → COMPETING_NARRATIVES (−) → PUBLIC_BELIEF in market fundamentalism	Counter-movements can strengthen competing narratives, weakening public belief in market fundamentalism.
6	Lower PUBLIC_BELIEF (−) → POLITICAL_POWER → less POLICY_ADOPTION	Lower public belief can reduce the political power available to sustain further policy adoption.

Loop summary

Extreme POLICY_ADOPTION → bad OUTCOMES → SHOCKS → COUNTER_MOVEMENT → reduced BELIEF → reduced POLICY_ADOPTION

This balancing effect can arrive with a substantial delay. Short-term booms may conceal long-run fragility—as in pre-2008 financialization or pre-crisis austerity—so the feedback from poor outcomes may emerge only after the reinforcing dynamics have operated for some time.

B2 – Credibility and scandal loop

Step	Causal relationship	Mechanism and explanation
1	MF_CONTENT BIAS & LOW RIGOR (+) → EVIDENCE-REALITY GAP	The more propagandistic the “research” becomes, the larger the gap can grow between its claims and mainstream academic or empirical findings.
2	EVIDENCE-REALITY GAP (+) → EXPOSÉS & REPUTATIONAL HITS	Investigative journalism, leaked documents, and academic critiques can make that evidence-reality gap visible, including through reporting on climate-denial funding or tobacco links.
3	REPUTATIONAL_HITS (+) → CREDIBILITY_LOSS (−) PERCEIVED_CONSENSUS & ELITE_BELIEF	Repeated reputational hits can lead some elites and media organizations to view the think tanks as partisan advocacy shops rather than neutral experts.
4	CREDIBILITY_LOSS (−) → MEDIA_AMP & POLICY_ADOPTION	As credibility falls, media amplification and policy influence can also decline.

Loop summary

Propaganda excess → credibility crisis → reduced influence

This loop may be relatively weak inside a core right-wing media ecosystem that protects its own institutions, but stronger in more pluralistic or technocratic settings such as courts, bureaucracies, and some mainstream media organizations.

B3 – Regulation and transparency loop

Step	Causal relationship	Mechanism and explanation
1	REVELATIONS about dark money & influence (+) → PUBLIC_CONCERN	Leaks, academic research, and advocacy campaigns can expose donor networks, conflicts of interest, and forms of corporate capture.
2	PUBLIC_CONCERN (+) → REGULATORY_PUSH	Public concern can create pressure for disclosure, lobbying restrictions, and campaign-finance rules.
3	REGULATORY_PUSH (+) → TRANSPARENCY & FUNDING_CONSTRAINTS (−) → FUNDING	Greater transparency or tighter funding constraints can make anonymous donor-advised funding more difficult and may deter or alter donor behavior.
4	Lower FUNDING (−) → TT_CAP & INFRA → weaker MF_CONTENT & MEDIA_AMP	Lower funding reduces think-tank capacity and movement infrastructure, weakening the production and amplification of market-fundamentalist content.

Loop summary

Exposure → regulation → funding limits → reduced capacity

B4 – Institutional capture → institutional collapse

This balancing mechanism is subtler because it arises when market-fundamentalist policies weaken the institutional foundations on which functioning markets themselves depend.

Step	Causal relationship	Mechanism and explanation
1	POLICY_ADOPTION (anti-union, anti-public investment, deregulatory) (−) → STATE_CAPACITY	Anti-union, anti-public-investment, and deregulatory policies can degrade public services, regulatory agencies, and civil-service capacity.
2	STATE_CAPACITY (−) → ABILITY_TO_DELIVER_BASIC_GOODS	Weaker state capacity reduces the ability to deliver high-quality schools, infrastructure, healthcare, and disaster response.
3	FAILURE_TO_DELIVER (+) → LEGITIMACY_CRISIS & POLITICAL_VOLATILITY	Persistent failure to deliver basic goods can erode trust not only in “big government,” but in institutions overall, including property rights and the rule of law.
4	VOLATILITY (−) → FAVORABILITY_FOR PREDICTABLE MARKETS	Even many capitalists prefer predictability. Severe volatility can drive investors away or create demand for a different governing model, whether authoritarian or social democratic.
5	DEMAND_FOR_ALTERNATIVES (+) → COUNTER_MVT & POLICY_REORIENTATION (−) POLITICAL_POWER of supply-side ideologues	A legitimacy crisis can therefore increase demand for alternatives and policy reorientation, weakening the political power of supply-side ideologues.

Loop summary

Market fundamentalism undermines the very institutional foundations markets need, eventually reducing its own appeal.

Figure 5. Outcomes, shocks, and balancing loops (B1–B4). This view brings together policy performance, institutional capacity, crises, counter-movements, credibility losses, and regulatory responses.

flowchart TD %% B1–B4 – Outcomes, shocks, credibility, and backlash policy_adopt["Adoption of supply-side / neoliberal policies (from R1, R2)"] policy_perf["Policy performance (growth, stability, welfare)"] state_capacity["State capacity & institutional quality"] shocks["Visible shocks & crises (financial crashes, climate disasters, pandemics)"] counter_mvt["Counter-movements & critical expertise (unions, progressive think tanks, climate orgs)"] competing_narr["Competing narratives (heterodox econ, justice, climate)"] public_belief["Public belief in market fundamentalism (to R1)"] elite_belief["Elite belief in market fundamentalism (to R1)"] perc_cons["Perceived expert consensus (from R1/R3)"] pol_power["Political power of aligned actors (from R1)"] cred_gap["Evidence–reality gap (between propaganda & outcomes)"] exposés["Exposés & scandals (funding leaks, climate denial, regulatory capture)"] credibility_loss["Credibility loss of think tanks outside core base"] public_concern["Public concern over capture & dark money"] reg_push["Regulatory push (disclosure, lobbying rules, finance reform)"] trans_constraints["Transparency & funding constraints"] f_funding["Funding to ideological networks (back to R1)"] tt_cap["Think tank capacity (back to R1/R3)"] public_belief_in_state["Belief in value of capable public institutions"] %% B1 – policy failure & counter-movements policy_adopt -->|-| policy_perf policy_perf -->|+| state_capacity state_capacity -->|+| policy_perf policy_perf -->|-| public_belief policy_perf -->|-| elite_belief policy_perf -->|-| shocks shocks -->|+| counter_mvt counter_mvt -->|+| competing_narr competing_narr -->|-| public_belief competing_narr -->|-| elite_belief competing_narr -->|-| perc_cons public_belief -->|-| pol_power elite_belief -->|-| pol_power pol_power -->|-| policy_adopt %% B2 – credibility / scandal loop mf_content_b2["Market-fundamentalist content (from R1/R2/R3)"] mf_content_b2 -->|+| cred_gap policy_perf -->|-| cred_gap cred_gap -->|+| exposés exposés -->|+| credibility_loss credibility_loss -->|-| perc_cons credibility_loss -->|-| public_belief credibility_loss -->|-| elite_belief %% B3 – regulation & transparency exposés -->|+| public_concern public_concern -->|+| reg_push reg_push -->|+| trans_constraints trans_constraints -->|-| f_funding trans_constraints -->|-| tt_cap %% B4 – institutional erosion & backlash policy_adopt -->|-| state_capacity state_capacity -->|+| public_belief_in_state public_belief_in_state -->|-| identity_align_b4["Pure anti-state identity framing"] state_capacity -->|-| counter_mvt

7. Other causal influences

Influence	Variable(s)	Causal pathway	Diagram interpretation
Religious / moral framing	RELIGIOUS_ALIGNMENT	MF_CONTENT → RELIGIOUS_ALIGNMENT (via Christian free enterprise narratives) → IDENTITY_ALIGNMENT → PUBLIC_BELIEF. mf_content → religious_align → identity_align → public_belief	Market-fundamentalist ideas can be wrapped in religious language—Christian free enterprise, prosperity-gospel themes, and related frames—strengthening the link between ideology, identity, and belief.
International institutions	IFIs & TRADE_REGIMES (IMF, World Bank, WTO)	Atlas/think tanks → influence IFI discourse → embed market-fundamentalist conditionalities → POLICY_ADOPTION in debtor countries → SUCCESS_STORIES. mf_content → atlas_tt → ifi_trade → cond_policies → policy_adopt → success_stories → public_belief / elite_belief	Think tanks can shape discourse within international financial institutions; conditionalities and policy advice can then embed market-fundamentalist reforms in debtor countries, while selected “success stories” are circulated as evidence for the model elsewhere.
Academic capture	ACADEMIC_ECON_ORTHODOXY	FUNDING (via chairs, centers) → selective support for pro-market scholars → more market-friendly curricula → ELITE_BELIEF among future policymakers → POLICY_ADOPTION. f_funding_acad → funding_chairs → econ_orthodoxy → curricula → elite_belief → policy_adopt	Targeted funding for chairs, centers, and institutes can shape economics departments and curricula. That, in turn, affects what future policymakers learn and can feed into elite belief and policy choices.
Social media & algorithms	ALGO_ENGAGEMENT_BIAS, POLARIZATION	Polarizing, identity-laden market-fundamentalist content performs well → ALGO amplifies → MEDIA_AMP → PUBLIC_BELIEF & IDENTITY_ALIGNMENT → more polarizing content → etc. (another reinforcing loop). mf_content + identity_align → polarizing_content → algo_bias → media_amp → public_belief & identity_align	Polarizing, identity-laden content often performs well on engagement-driven platforms. Algorithmic amplification can therefore strengthen both public belief and identity alignment, while polarization generates still more content suited to the same incentives.

Figure 6. Other causal influences. These additional pathways connect religious framing, international institutions, academia, and social-media dynamics to the core model.

flowchart TD %% Additional causal influences: %% - Religious / moral framing %% - International institutions (IFIs, trade regimes) %% - Academic capture %% - Social media algorithms %% Shared core nodes (same logical variables as in previous diagrams) mf_content["Market-fundamentalist content"] identity_align["Identity alignment (patriotism, religion, tribe)"] public_belief["Public belief in market fundamentalism"] elite_belief["Elite belief in market fundamentalism"] policy_adopt["Adoption of supply-side / neoliberal policies"] media_amp["Media amplification (TV, newspapers, social media)"] %% ------------------------------------------------------------ %% Religious / moral framing %% ------------------------------------------------------------ subgraph RELIGION["Religious / moral framing"] religious_align["Religious / moral alignment (e.g. Christian free enterprise)"] end mf_content -->|+| religious_align religious_align -->|+| identity_align identity_align -->|+| public_belief %% ------------------------------------------------------------ %% International institutions (IFIs & trade regimes) %% ------------------------------------------------------------ subgraph IFI_BLOCK["International institutions (IMF, World Bank, WTO, trade regimes)"] ifi_trade["IFIs & trade regimes (IMF, World Bank, WTO, trade agreements)"] cond_policies["Market-fundamentalist conditionalities & advice"] success_stories["Global 'success stories' (poster countries for reforms)"] atlas_tt["Atlas / think-tank influence on IFIs"] end mf_content -->|+| atlas_tt atlas_tt -->|+| ifi_trade ifi_trade -->|+| cond_policies cond_policies -->|+| policy_adopt policy_adopt -->|+| success_stories success_stories -->|+| public_belief success_stories -->|+| elite_belief %% ------------------------------------------------------------ %% Academic capture %% ------------------------------------------------------------ subgraph ACADEMIA["Academic capture & econ orthodoxy"] funding_chairs["Funding for chairs, centers, and institutes"] econ_orthodoxy["Academic econ orthodoxy (pro-market bias in ideas)"] curricula["Market-friendly curricula and training of policymakers"] end f_funding_acad["Funding from elites and ideological networks"] f_funding_acad -->|+| funding_chairs funding_chairs -->|+| econ_orthodoxy econ_orthodoxy -->|+| curricula curricula -->|+| elite_belief elite_belief -->|+| policy_adopt %% ------------------------------------------------------------ %% Social media algorithms & polarization %% ------------------------------------------------------------ subgraph SOCIAL_MEDIA["Social media algorithms & polarization"] algo_bias["Algorithmic engagement bias (toward outrage & sensationalism)"] polarization["Political / cultural polarization"] polarizing_content["Polarizing, identity-laden market-fundamentalist content"] end mf_content -->|+| polarizing_content identity_align -->|+| polarizing_content polarizing_content -->|+| algo_bias algo_bias -->|+| media_amp media_amp -->|+| public_belief media_amp -->|+| identity_align polarizing_content -->|+| polarization polarization -->|+| identity_align polarization -->|+| public_belief

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8. References

Sources cited in the text are listed once below; repeated citations reuse the same reference number.

1. Wikipedia. Atlas Network
2. Wikipedia. State Policy Network
3. Brown Climate Social Science Network. Climate change denial: sources, actors and strategies
4. OUP Academic. Atlas asunder? Neo-liberal think tanks and the radical right
5. Alainet. Sphere of Influence: How American Libertarians Are …
6. Wikipedia. Dark Money (book)
7. Wikipedia. Koch network
8. The Guardian. Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution
9. The Guardian. Secretive donors gave US climate denial groups $125m over three years
10. EXPOSEDbyCMD. Dark Money Donor Conduit Funneled $195 Million to Right-Wing Groups in 2024
11. Center for Public Integrity. Donors use charity to push free-market policies in states
12. Scientific American. “Dark Money” Funds Climate Change Denial Effort
13. PMC. Climate Change Denial Books and Conservative Think Tanks
14. ScienceDirect. Text-mining the signals of climate change doubt
15. sciencepolicy.colorado.edu. Cool dudes