Mike Rustin on the beginning of the end of neo-liberalism

Michael Rustin on OpenDemocracy
From the beginning to the end of Neo-Liberalism in Britain
19 May 2010

The financial crash that brought the era of neo-liberalism to an end has now led to the formation of a novel coalition in Britain after 65 years of single-party government. This essay argues that it is important to understand what is special about the underlying economic and social crisis - and how the balance of forces is very different from those that wracked Britain in the 1970s and opened the way to Margaret Thatcher.

Anthony Barnett argues in The End of Thatcherism that the election has brought an end to an entire era of British politics. He also notes, while cautioning on the gap between word and deed, that the Coalition promises in its agreement some more progressive policies than we saw under the New Labour governments from 1997 to 2010, and under the previous Thatcher – Major governments. I agree that a very significant change has taken place, although it is unclear how progressive its overall outcome will be. I shall argue that the formation of a Conservative-Liberal Democrat coalition represents a bold political response to a crisis – the ‘credit crunch’ of 2008-9 and all that went with it – which is comparable in its severity to the crisis of the 1970s that brought Thatcherism into being. I propose that we can only understand the politics of this situation, and the risks and opportunities it brings, if we understand the societal nature of the crises themselves.

My argument, initially set out on the day after the election for the Raymond Williams Foundation draws upon the analysis of political regimes and their conjunctures formulated by the Italian Marxist Antonio Gramsci, in The Modern Prince, following a method of analysis developed by Marx, particularly in his analysis of the class struggles of nineteenth century France. The relations and balance of powers between class formations – historical ‘blocs’ – is a critical dimension of what happens politically, according to this way of thinking, though political decisions also have significance, and in some contexts decisive significance. There are ‘conjunctures’, or in terms of modern complexity theory ‘tipping points’, when a previously stable social formation enter conditions of instability. These may create opportunities for decisive political action, leading to radical changes in a social system. Classically, these are moments in which revolutions, or counter-revolutions, occur - 1789, 1933, 1917, or the overthrow of Salvador Allende in Chile in 1973.

These conjunctures have their milder equivalents in democratic societies, occurring at moments when systems previously in a state of relative equilibrium or stability become unstable and enter periods of crisis. One such crisis occurred in the 1970s, as the ‘welfare settlement’ which had underpinned broadly consensual politics in Britain after 1945, exploded in industrial and other conflicts. This political moment, perceived as threatening to the dominant order, was seized by Margaret Thatcher in Britain, and by Ronald Reagan in America, and they initiated a new era which we have come to think of as that of the new right, of neo-conservatism, or neo-liberalism. I suggest that the financial crisis of 2008 to the present is another such conjuncture, and has similarly given rise to the opportunity, and necessity, for radical changes.

The two crises compared
And the rest is here.