By CJ Polychroniou
The world is returning to the predatory laissez-faire capitalism that immiserated millions in the early 20th century and is predicated on neoliberal “voodoo economics,” void of empirical reference.
Since the late 1970s, most capitalist economies have been marching to the tunes of neoliberalism – a term originally coined in the 1930s as a moderate alternative to classical liberalism but used in our own times to signify preference for a set of economic policies favoring privatization, deregulation and a “minimal” state. This is the version of neoliberalism developed by Milton Friedman and the so-called Chicago School and is usually associated with the Pinochet regime in Chile and later on with the so-called “free-market” policies of Margaret Thatcher and Ronald Reagan. In more popular usage, it can simply be referred to as predatory capitalism.
The neoliberal transition is associated with financial capital’s rise to dominance and sharp changes in the social structure of capital accumulation, with developments in the US economy leading the way among advanced capitalist economies. The economic slowdown in the 1970s and the inflationary pressures that went along with the first major postwar systemic capitalist crisis created a window of opportunity for anti-statist economic thinking, which had been around since the 1920s but was spending most of its time hibernating because it lacked support among government and policy-making circles and had very few followers among the members of the chattering classes. The postwar capitalist era was dominated by the belief that the government had a crucial role to play in economic and societal development. It was the Keynesian legacy, even though Keynesian economics was never fully and consistently applied in any capitalist country.