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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

the ending of the neo-liberal period? « Previous | |Next »
October 17, 2011

Here's an idea to mull over.The background is this text and more specifically, this TheTurbulent Ending of the Twentieth Century chapter.

There is a sense emerging that the period of neo-liberalism is drawing to a close. It began in the 1970s with its call argument for a return to free-market economics and was marked by privatisation, a reduction of state power, and a reassertion of liberal economic principles that appealed to the classical liberalism developed by the Austrian philosopher Friedrich Hayek during the depression of the 1930s.

It is drawing to a close with the global financial collapse of September 2008 that required massive government intervention. This was reinforced by the collapse of the hegemony of Wall Street and the City and their model of finance capital, the subsequent debt crisis in Europe, and a global economic recession. This is being combined with the end of unrivalled USA supremacy, the massive digital technological and communications shift, and the on-going effects of climate change.

This suggests that we are experiencing not merely the end of the global financial crisis, but the end of a period----the neo-liberal one. What is emerging is structural change and the creation of new conditions for a very different sort of prosperity into the future. What is increasingly clear is that the old production patterns have become obsolete, that the old industries must modernise or disappear in competition. This is the period of Schumpeterian "creative destruction".

That is about as far as I've got. I only have a very vague sense of the vast innovation and growth potential that the economy is yet to tap. What is clearer is that those who represent the old industrial and financial order are very powerful. They still hold the levers of power and will use their power to protect their own interests aty the expense of the national interest.

Thus Murdoch’s News Ltd, which speaks on behalf of the neo-liberal order in Australia, will maintain the attack on the emerging renewable energy industries and the national broadband network and continue to resist major institutional innovation.

Carlota Perez describes this period inbetween old and new thus:

This is in fact the period when capitalism shows its ugliest and most callous face. It is the time ... when the rich get richer with arrogance and the poor get poorer through no fault of their own; when part of the population celebrates prosperity and the other portion (generally much larger) experiences outright deterioration and decline. It is certainly a broken society, a two-faced world. But while the poor can usually see the conspicuous consumption of the ostentatious members of the new ‘leisure class’, to these, the poor are often hidden from view. In the globalized world of the information economy, this is all the more true, given that the cleavage between the excessively rich and the extremely poor is basically international.

Perez argues that the sequence, technological revolution–financial bubble–collapse–golden age–political unrest, recurs about every half century and is based on causal mechanisms that are in the nature of capitalism.

| Posted by Gary Sauer-Thompson at 1:20 PM | | Comments (10)
Comments

Comments

"...the collapse of the hegemony of Wall Street..."? "...the end of unrivalled USA supremacy..."?

I'm not really a news junkie, but I think I would have noticed these things if they had happened. They haven't. The hegemony of Wall St. and the supremacy of the US are as much a part of life now as ever. The world of finance capital has avoided any serious adverse consequences from the GFC, and the US has more bases and is involved in more countries than ever before. Is this post just wishful thinking?

Gary, Please find four related references which point out (and describe) how the current crisis is much more deeply rooted than most people presume. And how it is in fact the inevitable outcome of the presumptions at the root of Western Civilization.

http://www.dabase.org/not2p1.htm

http://www.beezone.com/AdiDa/reality-humanity.html

http://www.adidamla.org/newsletters/toc-aprilmay2006.html

http://www.aboutadidam.org/readings/bridge_to_god/index.html

gordon,
Wall Street had to be bailed out by the state. Finance capital has to be bailed out by the state in Europe. China is now the banker of an indebted US that is facing a long period of economic stagnation.

Yes, Peter S. Stock, there were bailouts. That's part of what I meant when I said that finance capital has evaded the consequences of its actions.

And we are now seeing the events of 2008 being massaged in the public memory to remove the culpability of finance capital and substitute Government indebtedness as the culprit. I think there is every chance that this piece of sleight of hand will succeed.

Gordon,
I should have written the beginning of the collapse of the hegemony of finance capital. I was referring to a long wave of institutional structural change--in the sense of one techno-economic paradigm ending, and another emerging in a carbon constrained world where the price of fossil fuels will certainly rise.

The frenzy bubble of finance capital has well and truely burst in both the US and Europe and the power and wealth of the finance industry is now being critically discussed as the Occupy Wall Street protests deepen.

What is in formation is production capital taking the leadership, expanding production and widening demand----the shift to a low carbon economy-- with financial capital in a supporting role. It is a long wave of structural change that is just beginning---eg., companies, such as General Electric, Siemens, Alstom, Phillips, Hyundai, Samsung and virtually the entire car industry, have recognised that they need to reshape their businesses if they are to prosper in a world that prices carbon and values resource efficiency.

America is unable to openly acknowledge that its global economic power is in decline. Talk of declinism is not an option in Washington.

Yet the moment at which China becomes the world's largest economy is coming into view – the end of the decade seems a likely passing point.

However, even after the US has ceded its economic dominance, America’s military, diplomatic, cultural and technological prowess will ensure that the US remains the world’s dominant political power – for a while.

The post says "the end of unrivalled USA supremacy."

'Unrivalled' is the key word. A rising China is a challenge to the US.This is an era of massive US budget deficits, and rising Chinese power, and so the US must learn to manage its relative decline.


"A rising China is a challenge to the US"

Beijing is currently saying that it has has "every right" to demand Washington safeguard Chinese dollar assets; and that Washington needed to “come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.”

That's the US's banker talking.

Sorry, guys, I just don't believe it. China and OWS aren't going to save the world.

The Chinese are out for what they can get, and will work with the US to ensure that everybody else is neutered. There will be no China/US demarche. They are too deeply involved with each other for that.

And though I feel enormous sympathy and support for the unfortunate Greeks and for OWS and all their spinoff movements, the usual mechanisms of co-optation, penetration, intimidation, provocation and maybe a few strategic assassinations will render them harmless in the fairly short term.

The US has recently unveiled a memorial to Martin Luther King. That's what happens when a popular movement is safely buried. I suppose we might see a memorial to the OWS movement or one of its leaders sometime in the future.

The Coalition is increasingly becoming the anti-renewable energy party.

Its defence of the fossil fuel lobby becomes ever more aggressive with its plan to repeal the carbon price, to deter private investment in renewables, to deny compensation for carbon permits, and to scrap the Clean Energy Finance Council (CEFC).