A Glance in the Rear View Mirror to Understand the Present (Part 2)

Neo-liberal ideology is a hard nut to crack

13 June 2009 by Eric Toussaint

 [1] neo-liberal ideology has conquered so many of our collective representations that it has largely dominated political and economic thinking over the last three decades. Although it is currently questioned, it is still deeply embedded in the minds of opinion-makers and an overwhelming majority of decision-makers. Of course they are finding it harder to assert that we must trust the self-regulating ability of corporation CEOs and financial markets, yet their reasoning has not fundamentally changed.

The neo-liberal ideology, which is simply the capitalist vision of the world doctored to the taste of the late 20th and early 21st centuries, still prevails in universities, major economic journals, and the media. The new ideological kit for the next capitalist stage has not yet been produced on a mass scale. The approach developed before the crisis still holds good.

Right-wing governments just as almost all social-liberal governments still apply the neoliberal ideology, or submit to it, with or without a sense of shame. [2] Although worn to nothing, it still holds sway in the industrialised countries of the North, but also in Eastern Europe (Federation of Russia included) and in Third World countries. Several governments in the South that formerly developed a socialising, or even a Moscow / Peking inspired ‘marxist-leninist’ kind of discourse in the 1960s and 70s have embraced it with the fervour of the newly converted.

But we should note that those who produce ideology and draft the speeches of the heads of state of the most industrialised countries have shifted their reasoning. The crisis that burst in the heart of the system bred a sort of chrysalis within some zealous servants of the system. The neo-liberal larva wants to turn into a capitalist dragonfly. It wants to cast off its tattered grey suit and assume the motley appearance of a capitalist re-confection based, on the one hand, on a subtle balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. between freedom for capitalists, and on the other, on a sense of responsibility for the common good guaranteed by the State’s wise regulation. Since the crisis is multidimensional with a strong environmental component in addition to its economic and financial aspects, one and all - from Barack Obama to Nicolas Sarkozy via Gordon Brown - harp upon a new ‘green capitalism.’

Before analysing the ideological foundations of capitalist policies since the 1970s-80s, it is useful to remember that other policies, distinctly removed from the “hands off” variety, were implemented in capitalist countries for decades during the 20th century. The majority of them did indeed help maintain capitalism but contrasted with those that preceded the 1929 Wall Street crash as well as with those that would be developed in Chile from 1973, in the UK from 1979, in the US from 1980, and that eventually prevailed almost everywhere.

Translated by Christine Pagnoulle in collaboration with Judith Harris

(To be continued in Part 3 :
The liberal eclipse from the 1930s to the 1970s by Eric Toussaint)


[1The first part of this series ‘A Glance in the Rear View Mirror to Understand the Present’ was posted on the CADTM website on 3 June 2009 under the title ‘Adam Smith is closer to Karl Marx than of those who sing his praise’] From the 1970s to the world crisis of 2008-2009,[[The economic and financial crisis broke out in the US in 2007, namely in the area of housing and mortgage with the bursting of a speculative bubble. From the start it hit major institutions both in the US and in Europe (the UK, Germany, France, Switzerland, etc.). Simultaneously in 2007 a severe food crisis set in, affecting mainly populations in developing countries (between the end of 2006 and 2009 the number of starving people has risen from 850 million to 1 billion). From 2008 on this multidimensional capitalist crisis has become a global one.

[2Alan Greenspan, chairman of the US Federal Reserve from 1987 to 2006, explains in his autobiography how highly he thinks of Labour leaders such as Tony Blair and Gordon Brown for their adhesion to the neo-liberal offensive: “ In office from 1997 forward, Tony Blair and Gordon Brown, heads of a rejuvenated and far more centrist Labour Party, accepted Thatcher’s profoundly important structural changes to British product and labor markets. In fact Brown, the chancellor of the exchequer for a record number of years, appeared to revel in Britain’s remarkable surge of economic flexibility. (Brown encouraged my proselytizing to our G7 colleagues about the importance of flexibility to economic stability.) What socialism was left in twenty-first-century Britain was much reduced. (…). Britain’s success with the free-market thrust of Thatcher and “New Labour” suggests that their GDP-enhancing reforms are likely to persevere through the next generation.

Britain’s evolution from the ossified economy of the years immediately following World War II to one of the most open economies in the world is reflected in the intellectual journey of Gordon Brown, who described his education in an e-mail to me in 2007: “I came to economics principally through the concern about social justice my father taught me”. (…) In the eighties, I saw that we needed a more flexible economy to create jobs. My understanding of an inclusive globalization is that we must combine stability, free trade, open markets, and flexibility with investment in equipping people for jobs of the future, principally through education. I hope in Britain we have prepared ourselves best for the global economic challenge, buttressing our policies for stability with a commitment to free trade, not protectionism”. Alan Greenspan. 2007. The Age of Turbulence: Adventures in a New World, Penguin (Chapter 13).

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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