The Rise of the Market

The Rise of the Market

Critical Essays on the Political Economy of Neo-Liberalism

Edited by Philip Arestis and Malcolm Sawyer

The growth of neo-liberalism has been the dominant political force in the past two decades. This volume concentrates on understanding the political economy of neo-liberalism. It focuses on a number of the most critical issues and examines the essence of neo-liberalism, namely, the dominance of the market.

Chapter 3: The rise of neo-liberalism in advanced capitalist economies: towards a materialist explanation

Michael C. Howard and John E. King

Subjects: economics and finance, post-keynesian economics


Michael C. Howard and John E. King ‘The coming massive socialisation of the conditions of life will destroy free enterprise as the pillar of liberal ideology’ (Aglietta 1979, p. 385). 1. INTRODUCTION Most materialist accounts of the rise of neo-liberalism view it as a ruling class reaction to the upsurge of workers’ militancy, the retardation of productivity growth and the decline of profitability that began in the late 1960s.1 We argue that there is much more to it than this conjunctural crisis which, at most, acted only to trigger a neo-liberal offensive on the part of some political parties in leading capitalist states. Likewise, we regard the restructuring of American hegemony over the same period as related to, but not the fundamental cause of, the neo-liberal resurgence.2 Instead, we seek to explain neo-liberalism in a technologically determinist manner, although (in contrast to most theorists of business) we do not look primarily to the ‘new economy’ of information technology. Despite being consistent with historical materialism, however, the triumph of neo-liberalism represents a comprehensive refutation of one of the most important predictions made by Marxist theoreticians over the course of the previous century, which was also widely accepted by non-Marxists: that is, that the technical and social development of capitalism was inherently market-eradicating. The stark fact is that the rise of neo-liberalism was not predicted by any Marxist, of any persuasion. Much worse, it is the polar opposite of what classical Marxian theorists predicted, to wit, the increasing irrelevance of markets...

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