The End of Laissez-Faire?
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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.
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Chapter 3: Did neoliberal ideas create the neoliberal state and economy?

Damien Cahill

Extract

Having interrogated the assumption that state policies in the neoliberal era were a reflection of the normative visions of fundamentalist neoliberal theorists, a critical gaze can now be turned to the assumption that the neoliberal transformation of capitalist states and economies from the 1970s was primarily due to the direct influence of fundamentalist neoliberal ideas. This assumption is widespread in discussions of neoliberalism among both scholars and journalists alike. This chapter tests the validity of the idealist assumption that neoliberalism in practice was caused by the influence of neoliberal ideas – particularly by the influence of neoliberal think tanks and theorists. It begins by considering what substance there might be to this argument by examining the emergence of the source of fundamentalist neoliberal ideas and their proselytisation – the fundamentalist neoliberal movement, or ‘thought collective’. It then discusses possible transmission mechanisms for such neoliberal ideas from the movement to policy makers. The chapter then considers a range of contrary evidence to the thesis of ideational causation, and argues that the evidence for the idealist assumption turns out to be quite slim. Finally, the chapter asks ‘what was the influence of neoliberal ideas if not as blueprints for policy transformation?’ and answers that they have been more influential as legitimating frameworks for neoliberal agendas than as the main forces driving such agendas. For the idealist thesis that neoliberal ideas drove the neoliberal policy revolution to hold weight, three conditions must be satisfied.

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