Bill Mitchell and Thomas Fazi — Everything You Know About Neoliberalism Is Wrong

Some falsely assume that as a result of neoliberal globalization the national state has largely been superseded by transnational capitalism to the degree that national sovereignty no long matters very much. International liberals think that this is a good thing, since competition among nation states has led to conflicts and conflagration.

Bill Mitchell and Thomas Fazi argue otherwise. What has taken place rather is state capture.

...core capitalist countries have not been characterised by a withering away of the state. Quite the contrary, in fact. Even though neoliberalism as an ideology springs from a desire to curtail the state’s role, neoliberalism as a political-economic reality has produced increasingly powerful, interventionist and ever-reaching – even authoritarian – state apparatuses. 

The process of neoliberalisation has entailed extensive and permanent state intervention, including: the liberalisation of goods and capital markets; the privatisation of resources and social services; the deregulation of business, and financial markets in particular; the reduction of workers’ rights (first and foremost, the right to collective bargaining) and more in general the repression of labour activism; the lowering of taxes on wealth and capital, at the expense of the middle and working classes; the slashing of social programmes, and so on. These policies were systemically pursued throughout the West (and imposed on developing countries) with unprecedented determination, and with the support of all the major international institutions and political parties. In this sense, neoliberal ideology, at least in its official anti-state guise, should be considered little more than a convenient alibi for what has been and is essentially a political and state-driven project, aimed at placing the commanding heights of economic policy ‘in the hands of capital, and primarily financial interests’, as Stephen Gill writes. Capital remains as dependent on the state today as it did in under ‘Keynesianism’ – to police the working classes, bail out large firms that would otherwise go bankrupt, open up markets abroad, etc. 

In the months and years that followed the financial crash of 2007-9, capital’s – and capitalism’s – continued dependency on the state in the age of neoliberalism became glaringly obvious, as the governments of the US and Europe and elsewhere bailed out their respective financial institutions to the tune of trillions of euros/dollars. In Europe, following the outbreak of the so-called ‘euro crisis’ in 2010, this was accompanied by a multi-level assault on the post-war European social and economic model aimed at restructuring and re-engineering European societies and economies along lines more favourable to capital....

Social Europe
Everything You Know About Neoliberalism Is Wrong
William Mitchell, professor of economics at the University of Newcastle, New South Wales, Australia and Thomas Fazi, journalist, writer, filmmaker, and translator.