Progressives, Neoliberalism, and Austerity – beyond the Polanyian Impasse

Published on The Bullet, Socialist Project’s E-Bulletin No. 1141, by Martijn Konings, July 14, 2015.

It is now sometimes hard to remember – and for the generation that is now in college and wasn’t necessarily reading the opinion pages at the time, it may seem nothing short of perverse – but there was a period following the onset of the crisis when progressive commentary on economic and financial life was pervaded by intense optimism about the future. As overleveraged financial structures crumbled, progressive intelligentsia rang the death knell for the neoliberal principles that were so obviously responsible for the problems.  

At the height of the crisis in September 2008, the excitement about the ‘return of the state’ was palpable. That the bailouts had some morally problematic aspects did of course not go unnoticed, but those were nonetheless seen as secondary in importance to the basic lesson they taught – that the capitalist economy does not regulate itself and needs the state. The future seemed to belong to public regulation and Keynesian intervention … //

… Recharged Neoliberalism: … //

… The Neoliberal Project:

That the capture concept is a neoliberal invention – it was pioneered by George Stigler, a founding member of the Mont Pelerin society – should alert us to a blind spot in the progressive critique of neoliberal capitalism. The neoliberal project is itself already fundamentally a critique of the ways in which public institutions have been captured by special interests. It looks to austerity as a means to restore an authentic republican ethos, a self-reliance that is not cynically utilitarian but responsible and accountable, capable of serving as the backbone of political community. And here it is precisely the progressive-liberal character that is seen as the principal obstacle: it features as the embodiment of moral corruption, as elitist, condescending do-goodery that facilitates lazy, hedonistic dependency. The progressive critique of neoliberalism, then, operates somewhat unreflexively in the slipstream of the neoliberal assault on progressivism.

Of course, the neoliberal management of austerity has often been a highly technocratic and depoliticized affair. But what needs explaining is precisely how democratic publics have come to embrace such self-limitation. Similarly, it is true that only the U.S. has experienced a full-fledged movement of neoliberal populism. But the turn to austerity policies in the post-crisis Eurozone could never have been effective had it not been for the remarkable speed with which the focus of at least Western European public opinion was redirected from almost visceral disgust with financial elites to a general acceptance of key tenets of austerity policy – that budgets need balancing and debts need to be paid. Explaining the power of austerity therefore requires an ability to critically penetrate an economic imaginary that enjoys considerable ethical appeal and democratic traction. The Polanyian preoccupation with the idea that there exist inherent social and political limits to the expansion of market logics, and its reliance on conspiratorial explanations for why those limits are not being enforced, are really just distractions from the real question of why we are so invested in the logic of neoliberal capitalism.

It is reflective of the malaise of present-day progressivism that it can only understand formulations such as the latter as encouraging a retreat from political action. In practice, it is of course precisely the advocacy of policy change that is associated with a dismissive attitude toward the spate of critical energies that have flourished since the crisis, counselling cautious accommodation to austerity politics no matter how minute and short-lived the discounts on offer. That ethos serves to demobilize rather than energize resistance, and a meaningful critical engagement of neoliberal capitalism is premised on a break with a distinctly progressive-liberal way of thinking about economic life that is epitomized by the prominence of Polanyi’s ideas.

(full text).

(Neoliberalism – George J. Stigler: The Theory of Economic Regulation, on The Bell Journal of Economics and Management Science, Vol. 2, No. 1 (Spring, 1971), pp. 3-21, by RAND Corporation … buy it, or read it online for FREE).


Who Really Controls the World? Concrete Proof of the Global Elite, on Outsider Club, July 14, 2015;

238,000 US veterans died waiting for health care – leaked doc, on Russia Today RT, July 14, 2015;

Employment in selected Eurozone countries. No austerity or neoliberal miracles, on RWER Blog, by merijnknibbe, July 13, 2015;

Normandy Secrets: Forgotten Nazi Arms Caches a Bonanza for Historians, on Spiegel Online International, by Frank Thadeusz, July 13, 2015: For decades, a vast network of Nazi arms caches and supply depots in the forest of Normandy lay forgotten. Now, research shows the extent to which the Wehrmacht sought to defend itself against the impending Allied invasion;

The thing Bernie Sanders says about inequality that no other candidate will touch, on The Washington Post, by Jim Tankersley, July 13, 2015;

Tomgram: No Lone Rangers in Drone Warfare, on Tom Dispatch, by Pratap Chatterjee, July 12, 2015;

Met Police forced to issue apology to Cuba Solidarity Campaign, on Socialist Unity SU, July 11, 2015;

Putin Leads BRICS Uprising, on Counterpunch, by MIKE WHITNEY, July 10, 2015

Web of Surveillance: East German Snitching Went Far Beyond the Stasi, on Spiegel Online International, by Peter Wensierski, July 10, 2015 (Photo Gallery): Everyone knows about the Stasi and the extent to which it spied on the East German populace. But that was only a small part of the informing that went on. New research shows that snitching was vastly more common than previously thought;

Fascist moment, on Al-Ahram weekly online, by Abdel-Moneim Said, July 9, 2015: the Arab world is in the throes of a fascist conflagration, borne of Islamist extremism;

Film: Her War, Women vs. ISIS, 52.49 min, on RT on Air, June 15, 2015: The town of Serekaniye in Syria is the last major town bordering the “Islamic State”. The mainly Kurdish local population is determined to fight the murderous ISIS and prevent them from entering their town …; Watch the film in Russian;

10 World’s Most Peaceful Countries 2014, on Womenosophy, by Kate Gitman, Oct 29, 2014;

Nothing more on Greece’s actions, but yes, on alternative’s solutions or explanations:

YV: [To exemplify…] There was a moment when the President of the Eurogroup decided to move against us and effectively shut us out, and made it known that Greece was essentially on its way out of the Eurozone. … There is a convention that communiqués must be unanimous, and the President can’t just convene a meeting of the Eurozone and exclude a member state. And he said, “Oh I’m sure I can do that.” So I asked for a legal opinion. It created a bit of a kerfuffle. For about 5-10 minutes the meeting stopped, clerks, officials were talking to one another, on their phone, and eventually some official, some legal expert addressed me, and said the following words, that “Well, the Eurogroup does not exist in law, there is no treaty which has convened this group.”
Greece: Tsipras Surrenders to Troika Bandits, on Global, by Stephen Lendman, July 13, 2015;

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