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 8: The global financial crisis and the future of embedded neoliberalism

Damien Cahill

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


The word ‘crisis’ has several meanings. In its most common usage it refers to ‘a time of danger or great difficulty’. Certainly, when people talk about the global financial crisis, this is what they almost always mean. And with good reason: the ongoing fallout from the current crisis has been devastating for the working class throughout the capitalist world. Indeed, to describe the current period as ‘a time of great danger or difficulty’ is, perhaps, an understatement. However, there is another meaning of crisis – as ‘a decisive moment’ or ‘turning point’ – that gives a different inflection to the recent calamitous economic events. Whether consciously or not, it was in this sense that many progressive commentators wrote of the crisis in the early years after the collapse of the sub-prime mortgage market in the USA. Indeed, among the political left there was an air of inevitability about the imminent collapse of neoliberalism. It has been the purpose of this book to evaluate such claims and to determine whether the onset of the global financial crisis represents a decisive moment or turning point for neoliberalism, or whether it merely signals a time of danger or great difficulty. In other words, whether, rather than constituting a moment of genuine rupture, there has instead merely been a temporary disturbance to the hegemony of neoliberalism. This was done by first examining the common progressive claim that neoliberalism is at a fatal turning point and finding that this claim is based on untenable ideational assumptions.

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