Magazine article Soundings

After Neoliberalism Analysing the Present: The Founding Editors of Soundings Set out the Framing Analysis for Our Online Manifesto

Magazine article Soundings

After Neoliberalism Analysing the Present: The Founding Editors of Soundings Set out the Framing Analysis for Our Online Manifesto

Article excerpt

With the banking crisis and the credit crunch of 2007-8, and their economic repercussions around the globe, the system of neoliberalism, or global free-market capitalism, that has come to dominate the world in the three decades since 1980, has imploded. As the scale of toxic debt became evident, credit and inter-bank lending dried up, spending slowed, output declined and unemployment rose. The system's vastly inflated financial sectors, which speculate in assets largely unrelated to the real economy of goods and services, precipitated an economic crisis whose catastrophic consequences are still unfolding.

We believe that mainstream political debate simply does not recognise the depth of this crisis, nor the consequent need for radical rethinking. The economic model that has underpinned the social and political settlement of the last three decades is unravelling, but the broader political and social consensus apparently remains in place. We therefore offer this analysis as a contribution to the debate, in the hope that it will help people on the left think more about how we can shift the parameters of the debate, from one concerning small palliative and restorative measures, to one which opens the way for moving towards a new political era and new understandings of what constitutes the good society. (1)

For three decades, the neoliberal system has been generating vast profits for multi-nationals, investment institutions and venture capitalists, and huge accumulations of wealth for the new global super-rich, while grossly increasing the gap between rich and poor and deepening inequalities of income, health and life chances within and between countries, on a scale not seen since before the second world war. In North America and Western Europe - hitherto dynamos of the global economic system - rates of growth are now lower than during the early post-war decades, when there was a more even balance of power between the social classes. There has been a steep decline in manufacturing and a hot-house expansion of financial services and the service economy; and a massive shift of power and resources from public to private, from state to market. 'The market' has become the model of social relations, exchange value the only value. Western governments have shown themselves weak and indecisive in responding to the environmental crisis, climate change and the threat to sustainable life on the planet, and have refused to address the issues in other than their own - market - terms.

Likewise, the financial crisis has been used by many Western governments as a means of further entrenching the neoliberal model. They have adopted swingeing 'austerity measures' which, they claim, is the only way of reducing the deficits generated during the bonanza period of the 1980s and 1990s. They have launched an assault on the incomes, living standards and conditions of life of the less welloff members of society. In the UK, the cuts programme has frozen incomes, capped benefits, savaged public sector employment and undermined local government. It has encouraged private capital to hollow-out the welfare state and dismantle the structures of health, welfare and education services. The burden of 'solving' the crisis has been disproportionately off-loaded on to working people, targeting vulnerable, marginalised groups. These include low-income, single-parent families; children in poverty; women juggling part-time employment with multiple domestic responsibilities; pensioners, the disabled and the mentally ill; welfare-benefits and low-cost public housing 'dependants'; the young unemployed (especially black youth); and students. Youth facilities have been closed; and citizens who depend on public amenities for their social well-being find themselves bereft. Apart from its punitive and regressive social effects, this is a strategy destined to fail even in its own terms, since its main consequence will be a serious fall in demand and a collapse of tax revenues, deepening the downward economic spiral, with little fall in the deficit. …

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