Explaining the Neoliberal turn

a post from Transforming Society: a space where research evidence and critique can create positive social change

In this long read, Roger Brown, author of The Inequality Crisis: The Facts and What We Can Do About It, outlines causes of the Neoliberal turn and shows how it has created vastly increased and unjust social inequality. Crucially, he explains where we need to begin in order to reverse the tide.

In November 1984, at the age of 90, the former Prime Minister, the Earl of Stockton (previously, Mr Harold Macmillan), made his maiden speech in the House of Lords. Besides warning, somewhat presciently, about a growing division of comparative prosperity in the South and an ailing North and Midlands, he asked where the theories of monetarism had really come from:

“Was it America?” he inquired, “Or was it Tibet? It is quite true, many of your Lordships will remember it operating in the nursery. How do you treat a cold? One nanny said, “Feed a cold”; she was a neo-Keynesian. The other said “Starve a cold”; she was a monetarist.

For about thirty years after the end of the Second World War, the advanced economies of the West enjoyed unprecedented prosperity. There were big increases in growth and productivity; there was full or near-full employment; economic inequality fell; home ownership increased; there was a considerable degree of financial stability.

Since the mid-70s we have had much smaller increases in growth, productivity and investment; lower savings and higher debt; higher unemployment, with many leaving the workforce altogether; greater market concentration; greater inequality; falling social mobility; greater poverty; increased fraud and other forms of crime; reduced trust, especially in institutions; and recurrent financial crises. Even the growth in home-ownership has tailed off. Only on inflation has the performance of the major Western economies since the mid-1970s been better than before. So why did most Western countries abandon what, on nearly all economic and social criteria, was a successful model, in favour of one that has been so much less successful?

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