Top positive review
9 people found this helpful
on 28 August 2013
This little book is a powerhouse of information and analysis.The writing style is jargon free and there are copious and easy to digest data tables.In addition there are little coloured 'boxes' that provide handy little definitions and background context, so that the reader never has to flounder around wondering what is meant by Keynesian macroeconomics might mean, for instance.
The authors successfully plot the way that neo-liberalism has gone from the backwoods of intellectual theorizing and policy think-tanks into mainstream political thought and action. So much so that economic liberalism as an idea and agenda was for many politicians of left and right, not to mention their constituencies,seen as the 'only option',especially in the West.Even formerly closed off economies such as China,Russia and India by the late 80's ,early 1990's started to throw off the shackles of autarky, state controls and egalitarian thinking (in so far as it ever existed)in order to engage with the global market place. Proof of the power of simple ideas!
Neo-liberalism is essentially about 'small' government, trade and competition coupled with a focus on individual enterprise. Its early form arrived in the shape of rampant deregulation, privatisation and attempts at substantial welfare reform whilst balancing government budgets. This is the stuff of the Thatcher /Reagan era-circa the 1980's.This often went hand in a political conservatism that espoused open markets, personal responsibility,democracy for all and markets being left to get on with generating economic growth. Government would only intervene in the 'supply side' - mainly through the provision of incentives such as lower taxes, the so -called 'trickle-down' effect,but also through removing market 'blockages' such as over-powerful trade unions or an overgenerous welfare system. The idea was that costs and prices could fall, demand could rise, especially in export markets and wealth would follow.
As time went on,electorates in many western countries could see the benefits of Neo-Liberalism but sensed that a less doctrinaire approach might be more to their taste. Hence the arrival of the 'Third Way' in the guise of Tony Blair and Bill Clinton. So free markets had to be tempered with welfare provision and helping people into work rather then dependency. This optimism was linked to a political idealism in trying to improve the lot of developing countries through the encouragement of trade and good financial stewardship through the organs of the WTO and the World Bank using what was called 'soft power'.
The 90's was a period of growth, optimism for many economies, especially with particular countries in the East. The Asian 'Tigers',not to mention the 'Celtic' tiger came from nowhere to show that economic reform could bring stunning growth in output, employment and incomes for their citizens.The benefits of free -trade agenda although open to much criticism has been considerable. But then the costs start to mount...
The problem with unfettered markets , especially in the financial sector as this book details in unflinching detail, is that they are no respecters of national boundaries, tradition or what might be termed social welfare. Like an untrained Bull Terrier they can turn on their owners or indeed ,innocent bystanders. Neo-liberalism is and was about the interlinking of markets. So if one market turns 'bad' through the over -exuberance of a credit binge or confidence seeps away from a currency or asset class then expect problems. Speculators who can smell a profit through can start off financial crisis's which end up being an global economic melt-down not through any particular ill-will but because it is a natural consequence of their dealings.Witness the collapse of Argentina, Mexico, Britain's ignominious ejection from the ERM and the Asian collapse of the 1990's. To put the final cap on things, the global calamity of 2007 onwards,whose effects we are still all living through.The result is requirement for governments to bail out banks, face higher welfare bills and face unending years of low or no growth. Citizens have lost their savings, jobs and their homes. Businesses have gone under through lack of customers and lack of credit.The costs have been enormous. What is worse is that unlike the days of Keynesian demand management, western governments are unsure as to how to resuscitate their respective economies.
Neo-liberalism as the book suggests is far from a spent force. It is an amorphous concept capable of being re-invented to match the times. Globalisation however global or regional it is in its manifestations is here to stay. Unfettered markets have proved to be too volatile and unpredictable. So what is required is a movement towards greater global cooperation , transparency and an acceptance that steering markets in order to minimise their negative propensities is both a thankless and costly task, but one that needs doing. That is the underlying message of this book.
'Neo-Liberalism' is an excellent primer. My only criticism is that it is a little too willing to
play down the benefits of free-market thinking and a little too hasty to expose its short comings. Otherwise, recommended.