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Hopes and promises

Undead live longer

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Will neoliberalism emerge from the current crisis even stronger?

“I would say that the corona crisis is something like the last coffin nail for neoliberalism,” said the firm conviction of economist Marcel Fratzscher. His reasoning: “Now we see: The state is the last resort when it matters. The market can no longer function alone in crucial areas. The federal government has mobilized over a trillion euros in guarantees and direct aid. This is a signal that should make us all aware that a strong, efficient, well-functioning state is absolutely essential. “

However, Fratzscher overlooks the fact that neoliberalism in no way fundamentally demands a weak state. Economic historian Philip Mirowski explains: “However, a salient feature is that neoliberalism is not an advocate of laissez-faire and the small state. If anything, the lesson that work on neoliberalism has shown is that it is about strong states who construct the kind of market society that neoliberals believe in. ” Quinn Slobodian shows this in detail in his book “Globalists” that is worth reading. Fratzscher’s declaration is therefore not sufficient to herald the end of neoliberalism.

George Santayana’s dictum: “Those who cannot remember the past are doomed to repeat it” has been repeated countless times and has been rarely followed. A look back at the 2008 financial crisis is imperative right now so that the current crisis is not misused as a springboard for a neoliberal shock.

At the height of the financial crisis, leading economists who had always advocated more privatization, deregulation and cuts in government spending in line with the neoliberal Washington Consensus were astonishingly shy and the former chairman of the Federal Reserve Alan Greenspan admitted that he was “partially wrong”. Many predicted the end of neoliberalism like the then leader of the SPÖ, Alfred Gusenbauer: “The fall of Wall Street is for neoliberalism, what was the fall of the Berlin Wall for communism.” Last but not least French President Nicolas Sarkozy said at the time solemnly:

A certain idea of ​​globalization is dying with the end of financial capitalism, which has imposed logic on the whole economy and has helped to spoil it. The idea that the markets are always right was an insane idea.

It turned out differently, as we know today. The economist Heiner Flassbeck therefore rightly recalls:

The “financial crisis” became the “debt crisis”. While this was completely absurd given the fact that government debt had clearly only increased in the wake of the crisis, it was in line with the usual myth.

In his important book “Undead Live Longer. Why Neoliberalism Is Even Stronger After the Crisis”, economic historian Philip Mirowski explored the question of how it could be that the very group that triggered the crisis was not held accountable, but instead emerged stronger from the crisis. He writes:

Already in 2012 it was gradually forgotten that the crisis was essentially a crisis of capitalism and only as a result a state financial crisis. Government debt now seemed just as precarious as that of private banks. This dynamic was avoidable because it was completely predictable.

His résumé of the situation at that time: “A dark slumber fell over the country. Not only that the awareness of the crisis had evaporated again without there being any serious attempt to correct the mistakes that had almost brought the economy to a standstill – oddly enough, the rights from the turmoil were stronger, more daring and with an even greater greed and firmness than before the crash. “

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