Chapter 3: Labour Recommodification in the Global Transformation
(Prince Jugurtha, in Sallust’s Bellum Jugurthinum, c. 30 BC)1 In Rome, everything is for sale. HAYEK’S TRIUMPH: THE ASCENDANCY OF ‘NEOLIBERALISM’ In the 1970s, Polanyi’s Transformation unravelled, sending industrial citizenship into retreat. What had been perceived as permanent institutions were swept aside, and assumptions of the recent past became bitterly contested terrain. The result was the disembedded phase of the Global Transformation. There is little point in looking for a smoking gun – Margaret Thatcher and Ronald Reagan, information technology, the oil crises, the emergence of Japan as an industrial power or the newly industrializing countries (NICs) eroding the ability of welfare states to compete in terms of costs and speed of change. The fact is that industrial citizenship crumbled, aided by policies that crystallized in the 1980s as the Washington Consensus. By the end of the century, the dictates of competitiveness had become the yardstick for assessing all institutions, policies and reforms. The changes were reflected in the intellectual and political ascendancy of the Chicago School of law and economics forged in the 1970s. Although its roots lay in the eighteenth century, notably in the writings of Adam Smith, it drew its inspiration from Hayek, Milton Friedman and his colleagues. It put regulations in a new perspective, stating that they could be justified only if they did not distort the market and promoted economic growth. Whereas protective and pro-collective regulations were previously part of social policy, helping to redistribute income, now regulations were to promote competition and support individuals...
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