What if neoliberal thinking had gone out of fashion?
The debacle of the European management of the coronavirus pandemic in 2020 was a very sad illustration of this.
Shortages of masks, vaccines, overwhelmed emergencies… The Covid-19 shock has upset the financial markets and required massive rescue plans from the States to partially respond to the shortages.
More recently, the dramatic resignation of Liz Truss was another strong signal.
Succeeding Boris Johnson, who was breaking little by little with the Thatcherite economic tradition of the
Tories
of rigor since the 1980s, the British Prime Minister proposed a "mini-budget" which provided for the reduction of public expenditure as well as State revenue (lower corporate tax rate, lower tax on the richest, reduction in taxes on property contributions, reduction in social security contributions, etc.).
Unpopular, disapproved of by the financial markets, this program to reduce the perimeter of the State caused a political crisis, even pushing Liz Truss to leave her mandate after... 44 days.
Neoliberalism, a doctrine that intends to put the State at the service of the proper functioning of markets, has it reached its limits?
This is the hypothesis put forward by the professor of economics at the University of Angers David Cayla, in his latest book
Decline and fall of neoliberalism
.
According to the researcher, we have to go back to the end of the 2000s and the subprime
crisis
to hear the death knell of this long hegemonic thought.
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According to Cayla, neoliberalism imposed itself in the second half of the 20th century thanks to four major crises which led to the disintegration of the mechanisms for regulating the economy: the end of the Bretton Woods agreements, the oil shock the return of inflation, the deindustrialization of developed countries and the disappearance of economic growth.
When inflation accelerated at the turn of the 1970s, economists were called in to help.
Unlike liberal thinkers, neoliberals have thought about the legal and formal frameworks within which markets must operate.
They have also succeeded in profoundly changing the way of seeing the market.
In other words,
neoliberalism should not limit itself to facilitating commercial exchanges and market interactions, it should also allow the coordination of behavior between individuals who have specific skills.
In this context, the State must put itself at the service of the optimal functioning of market mechanisms.
Experienced in Europe thanks to the restructuring of post-war Germany, the so-called neoliberal way of thinking spread throughout the second half of the 20th century.
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If this model is essential durably in the Western world, according to David Cayla, it is less and less topical.
A major event emerged as a turning point: the subprime
crisis
in 2008. In order to save the financial system after the bankruptcy of several banks, central banks were forced, in order to save the financial system, to intervene massively to regain control interest rates.
Such intervention is akin to a public administration of finance, which is the opposite of the objectives of the neoliberals.
During its years of expansion, neoliberalism did not face serious structural shortages.
Recently, the Covid-19 crisis has challenged this model.
And large-scale state intervention in the economy, even in the United States, has shown the limits of this model.
These crises are destined to recur, according to David Cayla, particularly in terms of energy.
But this reflexive void does not yet leave room for a new model.
The end of the project which consists in making the State the impartial arbiter of an autonomous regulatory system subject to competing markets opens the way to a different project in which, according to the economist, the State will have to even steer whole sections of the economy.
In a society where shortages are bound to multiply, the
Populism and neoliberalism
.
Doing without the market, like doing without the state, is not possible.
Summoning the jurist Alain Supiot and the anthropologist David Graeber, the author warns of the potential advent of a neo-feudal economic system, a consequence of the weakening of the rule of law: individual freedoms would then no longer be guaranteed and the loyalty to a superior, whether hierarchical or official, would be required of each.
Cayla calls for a global reflection on our economic system, in order to respond to the climate emergency and the scarcity of our natural resources, but warns: the essential restoration of respect for democratic will must not lead to cause individual freedoms.
Decline and fall of neoliberalism, David Cayla, De Boeck Supérieur editions, 2022, 288 p., €19.90.
Editions De Boeck Superior.