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 7: Ideologically embedded neoliberalism

Damien Cahill

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


Having examined the ways in which the neoliberal policy regime is embedded institutionally, as well as within a reshaped set of class relations, this chapter considers the ways that neoliberalism has become embedded in a pervasive ideological framework. It is argued that neoliberalism has become the ‘common sense’ policy approach among political elites in most advanced capitalist states. The chapter first identifies how neoliberalism supplanted the older post-World War Two policy consensus in many capitalist democracies. The neoliberal policy convergence among the major conservative and social democratic parties is examined, as is the rise to dominance of neoliberal policy frames among bureaucratic elites who shape and implement state policies. The chapter then examines the relationship between neoliberal theory and practice. If there are discrepancies between neoliberalism’s representation of the world, and the trajectory of the capitalist political economy, particularly with respect to the size and scope of the state, how can neoliberalism have become dominant? Have policy elites simply been hoodwinked by an irrational ideology, or is there a more compelling and complex story to be told? This chapter argues that, in order to understand the pervasiveness of neoliberal ideas among political and economic elites, neoliberal ideas must be read ideologically – as a discourse which at once obscures, but which also offers a partial representation of, reality, privileging capitalist class interests. The chapter then considers the extent to which neoliberal ideological and discursive frames have gained traction outside of elite circles, within and global population more generally.

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