Categories
Book and film reviews

The Strange Survival of Neoliberalism

From Colin Crouch
Suhrkamp, Berlin, 2011,  ISBN 978-3-518-42274-8, 148 pages

(Published in GralsWelt 75/2013)

Have you ever wondered how it was possible “That a crisis caused by the ruthless greed of the banks has been turned into a budget problem. As bankers' bonuses return to pre-crisis levels, thousands are losing their jobs in the public sector. " (P. 246)

Colin Crouch gives the answer in his book, which is as interesting as it is revealing.

First, he explains the development of liberalism, compared to other economic theories, over the past two centuries. It becomes clear that although there are many theories - or rather hypotheses - there are no generally recognized scientific economics based on hard facts. The professors' opinions contradict each other. The economic theories given as pioneering are more strongly shaped by political ideologies, fashion, and above all by the interests of influential, financially strong groups than by well-founded empirical facts. As a good friend, professor of economics, told me a few years ago: "The economy is actually not a science at all!"

As a result, economic policy in the 20th century, both in authoritarian and democratic states, has degenerated into a field of experimentation worldwide that plunged entire continents into crises and caused many millions of people to suffer.[i]

After the Great Depression of 1929, economic liberalism fell into disrepute. Many states, including the USA, were looking for better alternatives. Helpful regulations of the financial system were introduced, which prevented excesses in the post-WWII construction.

After the collapse of the Soviet Union and the fall of the Iron Curtain, neoliberalism saw itself as the winner. Nobody wanted to know anything more about the crash of 1929. In this way, the proponents of neoliberalism were able to reverse necessary restrictions and implement extensive liberalization and deregulation of the globalized economic and financial systems[ii]. The way was clear for speculators who had gone wild and triggered the banking crisis of 2008 and the EURO crisis. The financial sharks survived these crashes, at least one of which they were responsible for, almost unscathed. And they keep making fun of it as before. The taxpayer bears the speculative losses!

This disadvantage of ordinary citizens seems incredible for democracies! But our elected politicians have become the plaything of high finance. This can increasingly adapt state decisions to their interests; not only in the USA as the leading figure for the world economy. In the jargon of economists, this is what it means "State capture" (State capture).

In his book, Crouch shows with alarming clarity that the influence of high finance on governments through corruption, lobbying, and party and election campaign donations[iii], etc. is no longer limited to developing countries, but also has the western democracies under control.

Read this book and think with me about how we can free our democracy from the grip of the materialistic juggernaut of high finance.

Waiting and hoping for a revolution would not be a good solution![iv]

Endnotes:
[i] Cf. “Brief, terse, curious” on page 493 “The century of utopias”.
[ii] See. "The start of the 21st century" with the quote "Monetarism or human rights?", under "Economic and social affairs".
[iii] In the USA, the last presidential election campaign swallowed up a total of six billion euros. (www.spiegel.de/politik/ausland/wahlkampf).
[iv] In France, an anonymous pamphlet “The coming uprising” (“L'insurrection qui vient”) from 2007 became a bestseller. A German translation can be found on the Internet. When will our democratic politicians finally wake up?