Table of Contents

The Great Financial Meltdown

The Great Financial Meltdown

Systemic, Conjunctural or Policy Created?

New Directions in Modern Economics series

Edited by Turan Subasat

The Great Financial Meltdown reviews, advocates and critiques the systemic, conjunctural and policy-based explanations for the 2008 crisis. The book expertly examines these explanations to assess their analytical and empirical validity. Comprehensive yet accessible chapters, written by a collection of prominent authors, cover a wide range of political economy approaches to the crisis, from Marxian through to Post Keynesian and other heterodox schools.

Chapter 9: The systemic failings in framing neoliberal social policy

Ben Fine

Subjects: economics and finance, financial economics and regulation, radical and feminist economics


The main purpose of this chapter is to argue that the welfare regime approach (WRA), to social policy is, as the author puts it, well past its use-by-date. There is obviously some distance between this aim and interrogating whether the current economic crisis is systemic or not in some broader sense. However, part and parcel of the current crisis is how scholarship, ideology and policy respond to it. In casting aside the WRA, the chapter argues that its warranted demise, although almost certain continuing dominance over social policy scholarship, is part and parcel and reflection of the systemic nature of the crisis. Why this should be so in general terms is laid out. Subsequently, the chapter offer a critical overview of the WRA, highlighting its undue and inappropriate reliance on ill-fitting ideal types, its inappropriate extension in application in time and place beyond both developed countries and the post-war boom and its most immediate aftermath (for both of which it is arguably also more or less analytically inappropriate), its increasingly casual approach to theory and convergence towards mainstream thinking, and its failures in capacity to address policy alternatives. These devastating weaknesses of the WRA derive primarily from its failure to incorporate a full understanding of neoliberalism in general and of the financialization at its heart in particular. Born out of the post-war boom and the early clash of its conditions with neoliberalism, the WRA has failed to move on even though it has consolidated its position as the leading way in which to understand social policy. As a result, as taken up in the concluding remarks, just as paralysis in the discipline of economics can be taken as an index of the systemic nature of the current crisis (being exposed as both inadequate and unable to change), so the same is exposed as applied to WRA and social policy.

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