The End of Laissez-Faire?

The End of Laissez-Faire?

On the Durability of Embedded Neoliberalism

Damien Cahill

When the global financial crisis hit in 2007, many commentators thought it heralded the end of neoliberalism. Several years later, neoliberalism continues to dominate policy making. This book sets out why such commentators got it so wrong, and why neoliberalism remains so durable in the face of crisis.

Chapter 5: The class embedded nature of neoliberalism

Damien Cahill

Subjects: economics and finance, political economy, politics and public policy, political economy


This chapter begins the more detailed examination of the specific mechanisms through which neoliberalism is socially embedded by focusing upon the transformations within class relations that underpinned profits and capital accumulation during the neoliberal era. The chapter begins by examining the contours of economic performance in the global and advanced capitalist economies under neoliberalism. It takes issue with those Marxist scholars who characterise the era as one of persistent stagnation, long downturn or unresolved crisis. In contrast, it is argued that the economic crisis of the 1970s provided the context and impetus for a state-facilitated neoliberal restructuring of production and finance, resulting in increased rates of profit and GDP growth from their lows of the 1970s. The chapter then examines how this was dependent upon, and in part helped to produce, a transformation of the balance of power within the social relations of production such that the associational power of labour was weakened, capital increased its ability to assert its prerogatives over labour, while labour concurrently became much more integrated into global circuits of finance.

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