The Strange Non-Death of Neo-Liberalism

The financial crisis seemed to present a fundamental challenge to neo-liberalism, the body of ideas that have constituted the political orthodoxy of most advanced economies in recent decades. Colin Crouch argues in this book that it will shrug off this challenge. The reason is that while neo-liberalism seems to be about free markets, in practice it is concerned with the dominance over public life of the giant corporation. This has been intensified, not checked, by the recent financial crisis and acceptance that certain financial corporations are ‘too big to fail'. Although much political debate remains preoccupied with conflicts between the market and the state, the impact of the corporation on both these is today far more important.

Several factors have brought us to this situation:

• Most obviously, the lobbying power of firms whose donations are of growing importance to cash-hungry politicians and parties;
• The weakening of competitive forces by firms large enough to shape and dominate their markets;
• The power over public policy exercised by corporations enjoying special relationships with government as they contract to deliver public services;
• The moral initiative that is grasped by enterprises that devise their own agendas of corporate social responsibility.

Both democratic politics and the free market are weakened by these processes, but they are largely inevitable and not always malign. Hope for the future, therefore, cannot lie in suppressing them in order to attain either an economy of pure markets or a socialist society. Rather it lies in dragging the giant corporation fully into political controversy. Here a key role is played by the small, cash-strapped campaigning groups who, with precious little help from established parties, seek to achieve corporate social accountability.

"This highly accessible book makes its case persuasively."
Times Higher Education

"A rich and powerful book. It pushes towards an analysis of neoliberalism not as the set of liberalizing forces that it depicts itself as being, but rather as a grouping of impulses that have both hampered government and weakened market competition."
Crooked Timber

"An excellent contribution to the study of political economy that directly resolves the puzzle it has identified."
Transfer: European Review of Labour and Research

"A well-reasoned and tightly argued analysis of our present predicament. Although written for the intelligent general reader, rather than subject specialists, his insights constantly provoke and illuminate. Far from being merely a dry dissection of neoliberal theory, the book also addresses how to make corporations behave better."
LSE Politics Blog

"Takes forward and moves beyond Karl Polanyi’s (1957) analysis of state/market relationsto match the changing conditions of the twenty-first century."
Journal of Contemporary European Studies

"The most important work on the political economy of modern capitalism since Keynes, Kalecki and Schonfield."
Philippe C. Schmitter, European University Institute

"Colin Crouch shows how neoliberalism as embodied in large corporations brought about the Great Recession of 2007 and yet, ironically, they profited in wealth and power from it - at everyone else's expense. A compelling read."
Michael Mann, University of California, Los Angeles

"An excellent contribution to the debate about neoliberalism. Crouch gives us a tightly reasoned and well balanced critique of the neoliberal philosophy that contributed significantly to the 2008 financial crisis. And his call for a more frank discussion in civil society of the moral and ethical assumptions behind neoliberalism is a refreshing addition to the traditional call for simply bringing the state back in to tame market forces."
John L. Campbell, Dartmouth College

Several factors have brought us to this situation:

• The lobbying power of firms whose donations are of growing importance to cash-hungry politicians and parties
• The weakening of competitive forces by firms large enough to shape and dominate their markets
• The moral initiative that is grasped by enterprises that devise their own agendas of corporate social responsibility

Both democratic politics and the free market are weakened by these processes, but they are largely inevitable and not always malign. Hope for the future, therefore, cannot lie in suppressing them in order to attain either an economy of pure markets or a socialist society. Rather it lies in dragging the giant corporation fully into political controversy.

Preface vii

About this Book xi

1 The Previous Career of Neoliberalism 1

2 The Market and Its Limitations 24

3 The Corporate Takeover of the Market 49

4 Private Firms and Public Business 71

5 Privatized Keynesianism: Debt in Place of Discipline 97

6 From Corporate Political Entanglement to Corporate Social Responsibility 125

7 Values and Civil Society 144

8 What's Left of What's Right? 162

References 181

Further Reading 184

Index 187