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The neoliberal (counter-) revolution

G Duménil, D Lévy There is a dramatic contrast between the last twenty years of the 20th century and the previous decades since World War II. It is common to describe the last twenty years of capitalism as “neoliberalism”. Indeed, during the transition between the 1970s and 1980s, the functioning of capitalism was deeply transformed, both within countries of the center and in the periphery. The earlier capitalist configuration is often referred to as the “Keynesian compromise.” Without simplifying too much, those years could be characterized, in the center countries—United States (and Canada), Europe, and Japan—by large growth rates, sustained technological change, an increase in purchasing power and the development of a welfare system (concerning, in particular, health and retirement) and low unemployment rates. The situation deteriorated during the 1970s, as the world economy, in the wake of the decline of the profit rate, entered a “structural crisis.” Its main aspects were diminished growth rates, a wave of unemployment, and cumulative inflation. This is when the new social order, neoliberalism, emerged, first within the countries of the center—beginning with the United Kingdom and the United States—and then gradually exported to the periphery. We explore below the nature of neoliberalism and its balance sheet after nearly a quarter of a century. Neoliberalism is often described as the ideology of the market and private interests as opposed to state intervention. Although it is true that neoliberalism conveys an ideology and a propaganda of its own, it is fundamentally a new social order in which the power and income of the upper fractions of ruling classes—the wealthiest persons—was reestablished in the wake of a set back. Although the conditions which accounted for the structural crisis were gradually superseded, most of the world economy remained plagued by slow growth and unemployment, and inequality increased tremendously. This was the cost of a successful restoration of the income and wealth of the wealthiest