The Strange Non-Death of Neoliberalism

Kevin Young assesses a persuasive analysis of the staying power of market-driven economics

September 29, 2011

Given the difficulty in finding analyses of neoliberalism that don't contain a generous hint of polemicism, Colin Crouch's new book, The Strange Non-Death of Neoliberalism, is a welcome departure. This highly accessible book maps out the historical emergence and enduring power of the doctrine that has come to dominate contemporary political economy.

Crouch argues that, prior to the recent crisis, the financial sector was probably the closest approximation to the free-market dictates of neoliberalism that has yet existed - and yet the system all but collapsed, leaving incredible suffering in its wake. How, then, has neoliberalism emerged relatively unscathed by the financial crisis?

Crouch goes on to provide a number of persuasive reasons why neoliberalism has shown such enduring strength as a doctrine and as a set of practices. Not only does it possess an uncanny ability to adapt to different national institutions, but its central concepts of consumer welfare and collective efficiency have promoted a transformation of governmental practices in which governments have sought to emulate the market rather than regulate it. What is more, Crouch contends, government policies that promote "free markets" also often enhance the political strength of corporations. Herein lies the key to neoliberalism's remarkable success.

The analytical focus of the book is on a particular tension between how the body of neoliberal theory suggests that the economy should operate and how the economy actually does operate. In this regard, Crouch centres his analysis not just on "market failures" (in other words, the inability of market processes to provide certain goods and services adequately) but also on a more basic unit of analysis: the firm. Crouch contends that neoliberalism is, in actuality, more about firms - specifically large corporations - than about markets. In this regard, his critiques of the neoliberal Chicago School's intellectual sleights of hand when it comes to consumer welfare analysis and antitrust legislation will no doubt be particularly fascinating to readers.

The book makes its case persuasively, but readers might find grounds for critique on two different fronts. First, the social class dynamics inherent within neoliberal policy prescriptions are relatively muted in Crouch's discussion. While one need not invoke class at every turn, it's difficult to imagine a system of political economy that has concentrated wealth so effectively, and with so little popular resistance. Since wealth begets political power, it's no surprise that vested interests have been able to defend the status quo relatively effectively, even amid economic disaster. Crouch acknowledges this; yet his analysis also elicits the question of whether it is the contemporary corporation that should be the centre of our attention, or elite power per se, with its wide assemblage of supporting institutions.

A second ground for critique lies in the book's analysis of alternatives. Crouch argues that the correct path to transcending the limitations of neoliberalism does not lie in a restrengthening of the state and its capacities for regulation. Rather, he contends, progressive transformation is more likely to come from the activism within civil society. While his analysis is sober and intelligent, it lacks a degree of realism. Elsewhere in the book he does a good job of documenting the "teeth" that civil society can have in improving corporate conduct (for example, in "naming and shaming" campaigns directed at certain business practices).

What seems to be elided, however, is that the power that civil society groups have is often leveraged power: civil society may act as a successful check on corporate malfeasance, but this is because these demands are backed up by the credible threat of state action. Thus while one finishes this book persuaded by its central argument, the way forward that Crouch proposes leaves us wondering why we need to choose between more state and more civil society. Why not both?

The Strange Non-Death of Neoliberalism

By Colin Crouch

Polity Press

224pp, £50.00 and £14.99

ISBN 9780745651200 and 2214

Published 24 June 2011

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