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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.
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"...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?