Neoliberalism’s Bailout Problem

Robert Pollin and Gerald Epstein in the Boston Review:

The most basic tenet undergirding neoliberal economics is that free market capitalism—or at least some close approximation to it—is the only effective framework for delivering widely shared economic well-being. On this view, only free markets can increase productivity and average living standards while delivering high levels of individual freedom and fair social outcomes: big government spending and heavy regulations are simply less effective.

These neoliberal premises have dominated economic policymaking both in the United States and around the world for the past forty years, beginning with the elections of Margaret Thatcher in the United Kingdom and Ronald Reagan in the States. Thatcher’s dictum that “there is no alternative” to neoliberalism became a rallying cry, supplanting what had been, since the end of World War II, the dominance of Keynesianism in global economic policymaking, which instead viewed large-scale government interventions as necessary for stability and a reasonable degree of fairness under capitalism. This neoliberal ascendency has been undergirded by the full-throated support of the overwhelming majority of professional economists, including such luminaries as Nobel Laureates Milton Friedman and Robert Lucas.

In reality neoliberalism has depended on huge levels of government support for its entire existence.

More here.