The Strange Non-Death of Neoliberalism

Article excerpt

CoUn Crouch: The Strange Non-Death of Neoliberalism Cambridge: Polity Press 2011, pp. 224

Since the outbreak of the financial and banking crisis - with the subprime crisis in the US in the Spring of 2007 - there has been no lack of attempts at explanation accompanied by a swan song to the era of neoliberalism and the doctrine of unrestricted markets. But in spite of the state's massive interventions to support the financial market and individual, so-called system-relevant financial service providers, power relations have neither shifted for the benefit of the state, nor has the prevailing doctrine of the market as an instrument of allocation been significantly weakened. It is unsurprising that in view of the extent of the transnational crisis, the state, or more precisely the states, appear to be more reluctant than proactive actors. Democracy and intergovernmental coordination processes require more time than buying decisions on computer-based markets. However, if the market failure - of the financial sector, what is in theory the most efficient of all markets - cannot be mastered without major state intervention and if the representatives of neoliberalism call for the help of the state as a matter of course - whereby, according to the prevailing doctrine, this market intervention can only cause inefficiency - then this should be conducive to a mind shift in the economy and a focus on alternatives in politics.

There have been alternatives. Colin Crouch reminds his readers - the book addresses social scientists who do not necessarily have an economic background as well as politically interested laymen - of alternative positions: ordoliberalism of the Freiburg School and social market economy, left-wing liberalism with its North American character, Keynesianism and corporatism from the 1970s. But most notably he explains the rise of neoliberalism from the practical failure of "social democratic" economic orders of the post-war period in the wake of the oil crisis and the threat of recession and unemployment or inflation associated with it. Even if some aspects of this outline turn out rather broad-brush for the sake of conciseness: It is convincingly explicated under which conditions neoliberalism could be established as economicpolitical concept in the mid-1970s.

Moreover, Crouch points out the aspects in which neoliberalism differs from competing positions. In contrast to classical liberalism neoliberalism does not consider competition an indispensible precondition for market processes. Instead, this position relies on the market with a view to the results: The guiding principle is not freedom of choice and consumer sovereignty, but the message is consumer orientation and greater welfare through greater efficiency. The result is the preferential treatment of large organisations instead of strong antitrust laws and therefore possibly also of global corporations which dominate the market instead of small and medium-sÌ2ed enterprises. A central difference to the Uberai representatives of a "social market economy" becomes particularly apparent with regard to social integration and the balance of interests: NeoUberals are avowed opponents of trade unions, as these prevent the smooth operation of the labour market. Furthermore neoUberaUsm opposes economic activities of the state, as this is said to protect specific industries or businesses from market competition. Conversely, the privatisation of state or public enterprises is advocated. Finally "new public management", i.e. the adaption of management instruments from the private sector to public service, is a central element of this field.

Crouch refers to the internal contradictions of the neoliberal trend, which he consistently infers from the market model and its specific limitations, i.e. he develops neoliberalism as a more or less persistent bundle of answers to specific disruptions of the market equilibrium, e.g. for dealing with externalities and public goods, transaction costs and distrust, market entry barriers or ties between industry and politics. …