Introduction
Across the globe, the far right is on the march. Racist, authoritarian, and fascist movements are gaining mass political support and forming governments in the U.S., Europe, and beyond. While sharp cost-of-living spikes are proximate causes, this existential threat to freedom and democracy has deeper historical roots. This article argues that its origins lie in the crisis of the neoliberal mode of regulation from 2008 onwards and sketches a framework for understanding this process. The argument proceeds by revisiting work I did over a decade ago, postulating three possible trajectories for the then-dominant neoliberal form of capitalist regulation in the wake of the 2007–08 global financial crisis, the effects of which were still roiling across the global political economy.1 The first was a consolidation of neoliberalism; the second, the rise of authoritarian economic nationalism; and the third, the development of a broad anti-neoliberal decommodification movement. While these categories exist at a high level of abstraction, they do nonetheless appear to offer a useful typology of the political economic currents of the present. In response to the global financial crisis, neoliberal strategies of public austerity, wage suppression, and attacks on workers’ rights were pursued by state elites as key tools of crisis management, alongside a massive expansion of subsidies for capital and asset owners. In this context, the conditions for a deep crisis of liberal democracy and the rise of the far right were created by a combination of the transparently unequal treatment of workers compared to capital and the wealthy, the social and economic devastation wrought by the global financial crisis, and generational trauma and dislocation arising from decades of neoliberalism that was embraced the world over by the main centre-left and centre-right parties. Mobilising a contradictory amalgam of authoritarian racist economic nationalism, paired with a form of hyper-neoliberalism, these political currents gained traction in the years before the COVID-19 pandemic but have been supercharged by high inflation and real wage cuts more recently. Alongside this, space has opened up for progressive, socialist, and social-democratic movements oriented towards decommodification, even as many centre-left parties continue to cling to neoliberal forms of governance and wonder why their electoral support is eviscerated. We are now living through an interregnum period, between the wreckage of neoliberalism and a yet-to-be-formed new economic and political order. To examine these issues, the article first sketches some analytically useful heuristics for understanding the dynamic relationships between states and processes of capital accumulation. It then outlines the core elements of neoliberalism and the economic and political crises it gave rise to. The three trajectories of crisis response are then examined in order to understand both the rise of authoritarianism and fascism, as well as the possibilities for a viable anti-fascist politics.
Capital accumulation and the state
In order to analyse the neoliberal roots of contemporary authoritarianism, it is first necessary to outline some conceptual heuristics for understanding the dynamics of capitalist social relations and states in historical context. Capitalism is founded on the relationship between those who sell their labour power for wages and salaries and those who own and control the means of production. Capitalists are impelled to exploit workers in order to generate profit, while workers, lacking control of the means of production, are impelled to sell their labour power to capital for wages. Capitalist social relations lack the means for their own reproduction—“the processes which permit what exists to go on existing.”2 Necessary elements for the reproduction of capitalist social relations are produced externally to such relationships and outside of the circuit of capital. There is a rich tradition of scholarship analysing this phenomenon.3 For example, labour power is not produced directly by capital but through social institutions such as schools and the family. Trust in money as a medium of exchange and store of value is underpinned by the authority of the state. Similarly, although the market dependence typical of capitalist economies exerts strong disciplinary powers over workers and capitalists, they also have anarchic tendencies and lack central coordinating mechanisms. As such, capitalist markets are heavily buttressed by state regulations and institutions.
Historically, it can be observed that capitalism develops through stages, each characterised by a distinct and supportive institutional ensemble. Such “modes of regulation” or “social structures of accumulation”4 facilitate relatively stable periods of capital accumulation but contain within them tensions and contradictions that, in turn, articulate with inherent contradictions within the capitalist mode of production such that, over time, they inevitably tend towards crisis. Thus, one way of understanding the history of the development of capitalism is as the history of distinct periods, characterised by historically specific institutional ensembles that facilitate long periods of accumulation and expansion, often lasting several decades, punctuated by crises and interregnum periods, out of which new institutional structures emerge, facilitating the next more-or-less stable period of accumulation. Such institutional structures are “not the fruit of capitalist reasoning or the spontaneous result of competition”5 but rather contingent outcomes of conflict, experimentation, and compromise that can take decades to cohere.
The state is perhaps the most significant institution that facilitates capital accumulation and is central to all social structures of accumulation. The partial separation of the political and economic within capitalism means that although the state is integral to maintaining capitalist social relations, production for profit occurs, for the most part, outside the apparatuses of the state. The capitalist type of state generally does not have direct or majority control over the means of production. Decisions including where to invest, levels of employment, and types of jobs available are generally made by owners of capital on the basis of expected returns and, as such, are quarantined from processes of democratic deliberation. Yet such decisions are also fundamental to the material living conditions of the majority of the population within any polity. States must therefore secure conditions for capital accumulation and profit, on the one hand, while also maintaining political legitimacy and social harmony.6 These two conditions are often in tension, and this tension largely shapes the direction of economic and social regulation.
What was neoliberalism?
The dynamic relationships between processes of capital accumulation and the capitalist type of state are central to understanding the evolution of neoliberalism and how it generated the conditions for the rise of authoritarianism. A useful way of viewing neoliberalism is as a historically specific institutional ensemble that facilitated capital accumulation in the period, roughly, from 1980–2007.7 It was historically specific in that it emerged in a particular historical situation—the crisis of the mode of regulation that facilitated capital accumulation and mediated capitalist social relations in the post-WWII period. And it was an institutional ensemble that developed gradually through messy processes of contestation and compromise rather than through the application of a rational blueprint for change. The new neoliberal “social structure of accumulation,” or “mode of regulation,” was nonetheless radical and disruptive.
With respect to the regulation of the capital relation, it entailed a confrontation with the power of organised labour as well as a global reorganisation of capitalist production. From the early 1980s onwards, governments across the advanced capitalist economies sought to restore conditions for profitable accumulation by attacking the power of organised labour that had been bolstered by full employment during the post-war boom years and had experienced a militant upsurge from the late 1960s and through the 1970s. On the one hand, neoliberal governments used militant tactics of direct confrontation against powerful unions, such as in the miners’ strike in Britain and the air traffic controllers dispute in the U.S., serving as a warning about the consequences of working-class militancy. On the other hand, under the guise of “labour market deregulation,” the regulation of labour was transformed, undermining collectivist arrangements and favouring managerial prerogatives.
Concurrently, the organisation of capitalist production changed markedly. New techniques of production were developed, as well as qualitatively new commodities. Tariffs were reduced, and a new global geography of production emerged, gutting working-class employment in the manufacturing sectors of advanced capitalist countries and expanding the services and finance capital sectors in those same countries. States walked away from active industrial policy and economic coordination. Taken together, these changes thoroughly disorganised the working class and severely weakened organised labour.
Modes of public service provision were also radically reconfigured by neoliberalism. While the state as a proportion of GDP rarely shrank, austerity was pursued with respect to public services, alongside the engagement of the private sector in the delivery of public services. Publicly owned corporations and utilities were sold off, and markets were created for hitherto state monopolised services, including education, healthcare, and unemployment assistance. Subsidies, whether direct or indirect, continued to flow from public to private, which, alongside fiscal austerity, helped prop up these newly marketized sectors.
Macroeconomic policy was reoriented. In many countries, cuts to corporate taxation and the flattening of income tax regimes became the norm. Over time, monetary policy shifted to a focus on maintaining low and stable inflation, often at the expense of unemployment, and often conducted according to a rules-based regime by an “independent” central bank.
Across the globe, markets were deregulated, entailing removal of restrictions governing how capital could operate and move across borders. Perhaps most significant in this regard was the deregulation of finance and the floating of exchange rates, making states much more vulnerable to movements in bond and currency markets and therefore subject to their discipline. Key supranational institutions became repurposed to oversee the new neoliberal rules governing cross-border trade, in which sovereign decision making was assumed to be the exception rather than the norm and corporate rights were elevated. Similarly, numerous states enacted various forms of competition policy, thereby subjecting their own internal apparatuses to a neoliberal calculus. In a range of arenas, decisions of the state that impinge on capitalist prerogatives and decision making were quarantined from democratic deliberation. Decisions were made according to codified rules, procedures, and rationalities that, for the most part, underwrote capitalist profits. Often referred to as a process of depoliticization, it made decisions that had, in the post-war period, been subject to democratic deliberation instead the subject of bureaucratic procedure, underpinned by a neoliberal logic.
All of this was a boon for capital. By the early 2000s, neoliberalism in most countries had become the core logic of state. This had been achieved on terms largely favourable to capital, especially finance, and oligopolistic, globally active corporations. Real wages stagnated, and the labour share of national incomes shrank while the capital share increased. In countries that most aggressively embraced neoliberalism, wealth inequality exploded. While states were by no means powerless, they were certainly compliant in the face of the preferences of large capital.
Neoliberalism was never the product of a popular movement. It was developed and implemented by political and intellectual elites and leaders of capital. Within the working class, the experience of neoliberalism was variegated and complex. Support for free trade was relatively strong, alongside support for universalist welfare institutions and antipathy towards privatisation. Nonetheless, for much of the neoliberal era, attitudinal surveys suggested that there were low levels of support for programs of re-nationalisation and an acceptance of a role for the private sector in the provision of public services. The strongest resistance to neoliberalism tended to come from the global south, where the process of neoliberalisation was more widely brutal and undermined fundamental elements of people’s livelihoods—through measures such as dictatorship, inflation, and loss of access to land. In the advanced capitalist economies, resistance was always present, but it was rarely sufficient to dislodge neoliberalism as the core logic of state and rarely expressed an anti-systemic orientation.
Notwithstanding the durability of neoliberalism over nearly three decades to 2007, one can readily see how it was experienced, at least by sections of the working class, as entailing state capture by elites and a loss of control over public life by ordinary people, as state functions were increasingly ceded to large, private oligopolies with opaque internal structures. Little wonder that notions of a “deep state” and the need to “drain the swamp” would resonate with millions of workers once crisis arose.
Neoliberal crisis management and the rise of right-wing authoritarianism
Neoliberalism has been in a state of ongoing and unresolved crisis since 2008. Initially, this was an economic crisis beginning in the heavily financialised U.S. housing sector and quickly spreading to infect the global financial system as a whole. Trust in the integrity of financial instruments was eroded. States consequently implemented extraordinary measures to defend the profitability of financial and asset markets, effectively bailing out major banks and finance institutions as millions of workers simultaneously lost their jobs and livelihoods.
A few years after the onset of the global financial crisis, I postulated three possible trajectories of crisis response that would shape the global political economy over the medium term.8
One possible trajectory was a consolidation of neoliberalism. In this instance, neoliberalism would continue to be relied upon by state elites as the dominant form of crisis management. However, for neoliberalism to be consolidated in a durable manner, capital accumulation would need to be revived through extending the sphere of commodification and profit-making via further privatisation and marketisation, as well as through confrontations with organised labour, wage suppression, and a reorganisation of production. All the while, states would simultaneously need to establish the conditions for political legitimacy while relying on a strategy likely to deepen inequalities.
A second possible trajectory was authoritarian economic nationalism. In this scenario, neoliberal techniques of crisis management would fail to secure conditions for either capital accumulation or the political legitimacy of dominant state elites. In response to the crisis in neoliberalism and growing social unrest, a more economic nationalist agenda could emerge, protecting domestically based capital via tariff protections and exchange rate setting but with the possibility of further corporate bailouts. Assaults on organised labour would be likely, alongside the use of nationalist and racist discourses that would scapegoat ethnic minorities as the causes of economic hardship. In such a scenario, I posited that inter-capitalist-state rivalry could intensify, possibly leading to military conflict. The re-emergence of the far right at the time was posited as a potential harbinger of this kind of political-economic trajectory.
The third possible trajectory was a broad decommodification agenda. This would involve political movements to democratise economic processes and quarantine workers from market provisioning. Examples include, but are not limited to, programs institutionalising universal healthcare and education; price controls on essential services such as electricity, medicines, and water; direct public ownership of a range of producers; a guaranteed living wage; and support for collectivist institutions of labour.
At a broad level of abstraction, these typologies seem to offer a useful conceptual lens for making sense of the political-economic currents and conflicts reshaping the present. From 2008 onwards, neoliberalism was pursued as the dominant form of crisis management by states across the globe. This has amplified the inequalities inherent within the neoliberal era. While back in 2014 I argued, borrowing from Saad Filho,9 that although the global financial crisis represented a “crisis in neoliberalism,” it had yet to manifest as a “crisis of neoliberalism” that signalled its imminent demise, it now seems to be the case that the multiple, intersecting, and contradictory responses to the financial collapse of 2008 have produced a deep systemic crisis of the neoliberal mode of regulation and of liberal democracy itself. While this has created space for more progressive movements and parties advancing decommodification agendas as alternatives to and reactions against neoliberalism, the main beneficiaries, other than the capitalist class itself, have been a newly emboldened far right offering a radical agenda of economic nationalism, racism, xenophobia, and even fascism, often combined with a kind of hyper-neoliberalism.
At the onset of the GFC, neoliberal forms of regulation and accumulation strategies were widely blamed for the crisis, including the economic pain and social upheaval that it caused. At the same time, some of the stabilisation strategies pursued by states seemed to break with key tenets of neoliberal economic orthodoxy, including measures such as direct, albeit partial, state ownership of private capital. These factors in combination were a blow to the legitimacy of neoliberalism, though not fatal at the time. Notwithstanding this, the dominant forms of state regulation from 2008 until the COVID-19 pandemic generally took the form of neoliberal crisis management, followed by attempts at neoliberal consolidation. Neoliberalism remained the dominant logic of state, and the general orientation of states was to extend the scope and scale of neoliberalism in arenas of social provisioning, macroeconomic management, and the regulation of capital and labour. Yet economic growth and wage rises remained low. Inequality in many countries deepened, including in the distribution of factor incomes, wealth, and access to social services.
Within this context, progressive political movements with explicitly anti-neoliberal orientations sprouted, including the Occupy Movement, the Arab Spring, Jeremy Corbyn’s leadership of the British Labour Party, Bernie Sanders’s campaign within the U.S. Democratic Party, and a range of socialist parties within Europe. It was clear that political spaces had opened up for decommodification agendas to once again have traction. Yet rarely did such movements command sufficient popular support, or political power, to dislodge neoliberalism as the dominant logic of state. By the end of the 2010s, neoliberalism remained dominant but contested.
It would be the aftermath of the COVID-19 pandemic that turned a long-term crisis in neoliberalism into a full-blown crisis of neoliberalism and of liberal democracy more broadly. The sharp rise in inflation and decline in real wages in the wake of the COVID pandemic built on decades of trauma and resentment at the destructive, class-biased processes of neoliberalisation to create an incendiary political environment in which the far right has rapidly flourished. These movements tap into multiple generations of painful political and economic restructuring in which power and resources have flowed to the owners of capital and to the wealthiest in society, while workers have suffered. They feed on working-class rage at job losses, shrinking blue-collar employment opportunities, inequality in access to social services, and redundancies across the life cycle. They leverage the processes of neoliberal “depoliticization” and the genuine sense of disempowerment created by economic rules that seemed to privilege owners of capital to point fingers at forces beyond people’s control, such as a “deep state.”
To be sure, the mobilisation of racism has been crucial, most notably blaming migrants for the consequences of decisions actually made by employers and state elites. Here, far-right figures have tapped into years of racist, xenophobic, and nationalistic discourses that had become commonplace among neoliberal governments. The authoritarian right did not create their worldview or discourses from nowhere. They have deployed arguments and tropes that were already central to conservative neoliberalism. So too has the far right drawn on betrayal-by-elites rhetoric that had incubated for decades in neoliberal think tanks such as the Heritage Foundation and given contemporary expression in allegations around “cultural Marxism.”
Yet racist scapegoating and moral panic are not sufficient conditions to explain the rise of the far right. Crucial to this phenomenon is a feeling of betrayal and a desire to punish those held to have done the betraying. The historic violence of neoliberalism, paired with widespread market dependence, fiscal austerity, inflation, oligopolistic pricing, and weak labour market institutions, means that liberal democracy has come to be seen as corrupted—unable to deliver for ordinary people while bending over backward to support the already privileged.
While the rise in popular support for the far right is a reaction against neoliberalism and a symptom of neoliberalism is crisis, the economic orientation of far-right politicians and parties is often a contradictory amalgam of an explicitly anti-neoliberal economic nationalism—see, for example, Trump’s strong support for tariffs, opposition to an independent central bank, and his administration’s purchase of equity stakes in a host of corporations—with a kind of hyper-neoliberalism, including deep cuts to public services.
Anti-fascism
The far right has always been with us. Fascism is not new but rather is a recurring feature of capitalist societies. It gains power in times of economic crisis when democratic institutions are unable to deliver materially and when capitalist crises overwhelm democratic institutions. The current moment is one such time—an interregnum period10 between the neoliberal regulatory order and a new regime that is in the process of being formed. State elites the world over are desperately trying to facilitate conditions for capital accumulation while shoring up general political legitimacy. The two don’t fit neatly together. However, capital is far more likely to tolerate tariffs and partial ownership of industry if profits are buoyed, labour is disciplined, and favourable regulations are enacted. Capitalist social relations can thrive within a range of state forms, from authoritarian to democratic. And it is little surprise that across the world, the far right is strongly supported by fractions of big capital, especially from extractive industries, like big tech and the armaments industry. Such support is crucial for fascists and authoritarians to be able to expand their movements and maintain state power.
For the Left, the dilemma of a viable politics is different. On the one hand, many centre-left parties continue to cling doggedly to neoliberal forms of governance. This is partly a function of the durability of neoliberal mental modes but also of the centre-left’s close ties to capital and fear of capital rebellion of various types—capital flight, bond sell-offs, campaigns by media owners. The privileged position of capital within the policy-making process sits uneasily with calls for a fairer economic system. For the fascists and authoritarians, this issue is far less problematic.
When in government then, many centre-left parties continue to hew closely to neoliberal programs of public austerity, despite it being the kiss of death for a viable progressive politics. While in opposition, they lament the demise of central bank independence and critique the foolishness of tariffs. It is therefore little wonder that progressive social agendas have become viewed as elitist and that the electoral fortunes of centre-left parties are plummeting precipitously.
There are signs therefore that the only viable political contest today is between a racist, authoritarian, sometimes fascist nationalism and a progressive agenda of decommodification and social protection that rejects neoliberal orthodoxy. There are signs—and that is all that they currently are—of this materialising: in the success of Zohran Mamdani as mayor of New York and of Andy Burnham as UK Prime Minister, or in the fact that active resistance to Trump’s agenda has blunted, though not halted, the advance of fascism in the U.S. Fascism is an even greater threat to workers than neoliberalism, and democracy can only be saved if it is seen to deliver materially for the majority of the population. Appeals to democracy as an abstract concept are unlikely to have much appeal outside of high-paid, knowledge-based sections of the working class. The best chance of defeating fascism and authoritarianism may be with a political agenda that aims to democratise economic processes.
Notes
Introduction
Across the globe, the far right is on the march. Racist, authoritarian, and fascist movements are gaining mass political support and forming governments in the U.S., Europe, and beyond. While sharp cost-of-living spikes are proximate causes, this existential threat to freedom and democracy has deeper historical roots. This article argues that its origins lie in the crisis of the neoliberal mode of regulation from 2008 onwards and sketches a framework for understanding this process. The argument proceeds by revisiting work I did over a decade ago, postulating three possible trajectories for the then-dominant neoliberal form of capitalist regulation in the wake of the 2007–08 global financial crisis, the effects of which were still roiling across the global political economy.1 The first was a consolidation of neoliberalism; the second, the rise of authoritarian economic nationalism; and the third, the development of a broad anti-neoliberal decommodification movement. While these categories exist at a high level of abstraction, they do nonetheless appear to offer a useful typology of the political economic currents of the present. In response to the global financial crisis, neoliberal strategies of public austerity, wage suppression, and attacks on workers’ rights were pursued by state elites as key tools of crisis management, alongside a massive expansion of subsidies for capital and asset owners. In this context, the conditions for a deep crisis of liberal democracy and the rise of the far right were created by a combination of the transparently unequal treatment of workers compared to capital and the wealthy, the social and economic devastation wrought by the global financial crisis, and generational trauma and dislocation arising from decades of neoliberalism that was embraced the world over by the main centre-left and centre-right parties. Mobilising a contradictory amalgam of authoritarian racist economic nationalism, paired with a form of hyper-neoliberalism, these political currents gained traction in the years before the COVID-19 pandemic but have been supercharged by high inflation and real wage cuts more recently. Alongside this, space has opened up for progressive, socialist, and social-democratic movements oriented towards decommodification, even as many centre-left parties continue to cling to neoliberal forms of governance and wonder why their electoral support is eviscerated. We are now living through an interregnum period, between the wreckage of neoliberalism and a yet-to-be-formed new economic and political order. To examine these issues, the article first sketches some analytically useful heuristics for understanding the dynamic relationships between states and processes of capital accumulation. It then outlines the core elements of neoliberalism and the economic and political crises it gave rise to. The three trajectories of crisis response are then examined in order to understand both the rise of authoritarianism and fascism, as well as the possibilities for a viable anti-fascist politics.
Capital accumulation and the state
In order to analyse the neoliberal roots of contemporary authoritarianism, it is first necessary to outline some conceptual heuristics for understanding the dynamics of capitalist social relations and states in historical context. Capitalism is founded on the relationship between those who sell their labour power for wages and salaries and those who own and control the means of production. Capitalists are impelled to exploit workers in order to generate profit, while workers, lacking control of the means of production, are impelled to sell their labour power to capital for wages. Capitalist social relations lack the means for their own reproduction—“the processes which permit what exists to go on existing.”2 Necessary elements for the reproduction of capitalist social relations are produced externally to such relationships and outside of the circuit of capital. There is a rich tradition of scholarship analysing this phenomenon.3 For example, labour power is not produced directly by capital but through social institutions such as schools and the family. Trust in money as a medium of exchange and store of value is underpinned by the authority of the state. Similarly, although the market dependence typical of capitalist economies exerts strong disciplinary powers over workers and capitalists, they also have anarchic tendencies and lack central coordinating mechanisms. As such, capitalist markets are heavily buttressed by state regulations and institutions.
Historically, it can be observed that capitalism develops through stages, each characterised by a distinct and supportive institutional ensemble. Such “modes of regulation” or “social structures of accumulation”4 facilitate relatively stable periods of capital accumulation but contain within them tensions and contradictions that, in turn, articulate with inherent contradictions within the capitalist mode of production such that, over time, they inevitably tend towards crisis. Thus, one way of understanding the history of the development of capitalism is as the history of distinct periods, characterised by historically specific institutional ensembles that facilitate long periods of accumulation and expansion, often lasting several decades, punctuated by crises and interregnum periods, out of which new institutional structures emerge, facilitating the next more-or-less stable period of accumulation. Such institutional structures are “not the fruit of capitalist reasoning or the spontaneous result of competition”5 but rather contingent outcomes of conflict, experimentation, and compromise that can take decades to cohere.
The state is perhaps the most significant institution that facilitates capital accumulation and is central to all social structures of accumulation. The partial separation of the political and economic within capitalism means that although the state is integral to maintaining capitalist social relations, production for profit occurs, for the most part, outside the apparatuses of the state. The capitalist type of state generally does not have direct or majority control over the means of production. Decisions including where to invest, levels of employment, and types of jobs available are generally made by owners of capital on the basis of expected returns and, as such, are quarantined from processes of democratic deliberation. Yet such decisions are also fundamental to the material living conditions of the majority of the population within any polity. States must therefore secure conditions for capital accumulation and profit, on the one hand, while also maintaining political legitimacy and social harmony.6 These two conditions are often in tension, and this tension largely shapes the direction of economic and social regulation.
What was neoliberalism?
The dynamic relationships between processes of capital accumulation and the capitalist type of state are central to understanding the evolution of neoliberalism and how it generated the conditions for the rise of authoritarianism. A useful way of viewing neoliberalism is as a historically specific institutional ensemble that facilitated capital accumulation in the period, roughly, from 1980–2007.7 It was historically specific in that it emerged in a particular historical situation—the crisis of the mode of regulation that facilitated capital accumulation and mediated capitalist social relations in the post-WWII period. And it was an institutional ensemble that developed gradually through messy processes of contestation and compromise rather than through the application of a rational blueprint for change. The new neoliberal “social structure of accumulation,” or “mode of regulation,” was nonetheless radical and disruptive.
With respect to the regulation of the capital relation, it entailed a confrontation with the power of organised labour as well as a global reorganisation of capitalist production. From the early 1980s onwards, governments across the advanced capitalist economies sought to restore conditions for profitable accumulation by attacking the power of organised labour that had been bolstered by full employment during the post-war boom years and had experienced a militant upsurge from the late 1960s and through the 1970s. On the one hand, neoliberal governments used militant tactics of direct confrontation against powerful unions, such as in the miners’ strike in Britain and the air traffic controllers dispute in the U.S., serving as a warning about the consequences of working-class militancy. On the other hand, under the guise of “labour market deregulation,” the regulation of labour was transformed, undermining collectivist arrangements and favouring managerial prerogatives.
Concurrently, the organisation of capitalist production changed markedly. New techniques of production were developed, as well as qualitatively new commodities. Tariffs were reduced, and a new global geography of production emerged, gutting working-class employment in the manufacturing sectors of advanced capitalist countries and expanding the services and finance capital sectors in those same countries. States walked away from active industrial policy and economic coordination. Taken together, these changes thoroughly disorganised the working class and severely weakened organised labour.
Modes of public service provision were also radically reconfigured by neoliberalism. While the state as a proportion of GDP rarely shrank, austerity was pursued with respect to public services, alongside the engagement of the private sector in the delivery of public services. Publicly owned corporations and utilities were sold off, and markets were created for hitherto state monopolised services, including education, healthcare, and unemployment assistance. Subsidies, whether direct or indirect, continued to flow from public to private, which, alongside fiscal austerity, helped prop up these newly marketized sectors.
Macroeconomic policy was reoriented. In many countries, cuts to corporate taxation and the flattening of income tax regimes became the norm. Over time, monetary policy shifted to a focus on maintaining low and stable inflation, often at the expense of unemployment, and often conducted according to a rules-based regime by an “independent” central bank.
Across the globe, markets were deregulated, entailing removal of restrictions governing how capital could operate and move across borders. Perhaps most significant in this regard was the deregulation of finance and the floating of exchange rates, making states much more vulnerable to movements in bond and currency markets and therefore subject to their discipline. Key supranational institutions became repurposed to oversee the new neoliberal rules governing cross-border trade, in which sovereign decision making was assumed to be the exception rather than the norm and corporate rights were elevated. Similarly, numerous states enacted various forms of competition policy, thereby subjecting their own internal apparatuses to a neoliberal calculus. In a range of arenas, decisions of the state that impinge on capitalist prerogatives and decision making were quarantined from democratic deliberation. Decisions were made according to codified rules, procedures, and rationalities that, for the most part, underwrote capitalist profits. Often referred to as a process of depoliticization, it made decisions that had, in the post-war period, been subject to democratic deliberation instead the subject of bureaucratic procedure, underpinned by a neoliberal logic.
All of this was a boon for capital. By the early 2000s, neoliberalism in most countries had become the core logic of state. This had been achieved on terms largely favourable to capital, especially finance, and oligopolistic, globally active corporations. Real wages stagnated, and the labour share of national incomes shrank while the capital share increased. In countries that most aggressively embraced neoliberalism, wealth inequality exploded. While states were by no means powerless, they were certainly compliant in the face of the preferences of large capital.
Neoliberalism was never the product of a popular movement. It was developed and implemented by political and intellectual elites and leaders of capital. Within the working class, the experience of neoliberalism was variegated and complex. Support for free trade was relatively strong, alongside support for universalist welfare institutions and antipathy towards privatisation. Nonetheless, for much of the neoliberal era, attitudinal surveys suggested that there were low levels of support for programs of re-nationalisation and an acceptance of a role for the private sector in the provision of public services. The strongest resistance to neoliberalism tended to come from the global south, where the process of neoliberalisation was more widely brutal and undermined fundamental elements of people’s livelihoods—through measures such as dictatorship, inflation, and loss of access to land. In the advanced capitalist economies, resistance was always present, but it was rarely sufficient to dislodge neoliberalism as the core logic of state and rarely expressed an anti-systemic orientation.
Notwithstanding the durability of neoliberalism over nearly three decades to 2007, one can readily see how it was experienced, at least by sections of the working class, as entailing state capture by elites and a loss of control over public life by ordinary people, as state functions were increasingly ceded to large, private oligopolies with opaque internal structures. Little wonder that notions of a “deep state” and the need to “drain the swamp” would resonate with millions of workers once crisis arose.
Neoliberal crisis management and the rise of right-wing authoritarianism
Neoliberalism has been in a state of ongoing and unresolved crisis since 2008. Initially, this was an economic crisis beginning in the heavily financialised U.S. housing sector and quickly spreading to infect the global financial system as a whole. Trust in the integrity of financial instruments was eroded. States consequently implemented extraordinary measures to defend the profitability of financial and asset markets, effectively bailing out major banks and finance institutions as millions of workers simultaneously lost their jobs and livelihoods.
A few years after the onset of the global financial crisis, I postulated three possible trajectories of crisis response that would shape the global political economy over the medium term.8
One possible trajectory was a consolidation of neoliberalism. In this instance, neoliberalism would continue to be relied upon by state elites as the dominant form of crisis management. However, for neoliberalism to be consolidated in a durable manner, capital accumulation would need to be revived through extending the sphere of commodification and profit-making via further privatisation and marketisation, as well as through confrontations with organised labour, wage suppression, and a reorganisation of production. All the while, states would simultaneously need to establish the conditions for political legitimacy while relying on a strategy likely to deepen inequalities.
A second possible trajectory was authoritarian economic nationalism. In this scenario, neoliberal techniques of crisis management would fail to secure conditions for either capital accumulation or the political legitimacy of dominant state elites. In response to the crisis in neoliberalism and growing social unrest, a more economic nationalist agenda could emerge, protecting domestically based capital via tariff protections and exchange rate setting but with the possibility of further corporate bailouts. Assaults on organised labour would be likely, alongside the use of nationalist and racist discourses that would scapegoat ethnic minorities as the causes of economic hardship. In such a scenario, I posited that inter-capitalist-state rivalry could intensify, possibly leading to military conflict. The re-emergence of the far right at the time was posited as a potential harbinger of this kind of political-economic trajectory.
The third possible trajectory was a broad decommodification agenda. This would involve political movements to democratise economic processes and quarantine workers from market provisioning. Examples include, but are not limited to, programs institutionalising universal healthcare and education; price controls on essential services such as electricity, medicines, and water; direct public ownership of a range of producers; a guaranteed living wage; and support for collectivist institutions of labour.
At a broad level of abstraction, these typologies seem to offer a useful conceptual lens for making sense of the political-economic currents and conflicts reshaping the present. From 2008 onwards, neoliberalism was pursued as the dominant form of crisis management by states across the globe. This has amplified the inequalities inherent within the neoliberal era. While back in 2014 I argued, borrowing from Saad Filho,9 that although the global financial crisis represented a “crisis in neoliberalism,” it had yet to manifest as a “crisis of neoliberalism” that signalled its imminent demise, it now seems to be the case that the multiple, intersecting, and contradictory responses to the financial collapse of 2008 have produced a deep systemic crisis of the neoliberal mode of regulation and of liberal democracy itself. While this has created space for more progressive movements and parties advancing decommodification agendas as alternatives to and reactions against neoliberalism, the main beneficiaries, other than the capitalist class itself, have been a newly emboldened far right offering a radical agenda of economic nationalism, racism, xenophobia, and even fascism, often combined with a kind of hyper-neoliberalism.
At the onset of the GFC, neoliberal forms of regulation and accumulation strategies were widely blamed for the crisis, including the economic pain and social upheaval that it caused. At the same time, some of the stabilisation strategies pursued by states seemed to break with key tenets of neoliberal economic orthodoxy, including measures such as direct, albeit partial, state ownership of private capital. These factors in combination were a blow to the legitimacy of neoliberalism, though not fatal at the time. Notwithstanding this, the dominant forms of state regulation from 2008 until the COVID-19 pandemic generally took the form of neoliberal crisis management, followed by attempts at neoliberal consolidation. Neoliberalism remained the dominant logic of state, and the general orientation of states was to extend the scope and scale of neoliberalism in arenas of social provisioning, macroeconomic management, and the regulation of capital and labour. Yet economic growth and wage rises remained low. Inequality in many countries deepened, including in the distribution of factor incomes, wealth, and access to social services.
Within this context, progressive political movements with explicitly anti-neoliberal orientations sprouted, including the Occupy Movement, the Arab Spring, Jeremy Corbyn’s leadership of the British Labour Party, Bernie Sanders’s campaign within the U.S. Democratic Party, and a range of socialist parties within Europe. It was clear that political spaces had opened up for decommodification agendas to once again have traction. Yet rarely did such movements command sufficient popular support, or political power, to dislodge neoliberalism as the dominant logic of state. By the end of the 2010s, neoliberalism remained dominant but contested.
It would be the aftermath of the COVID-19 pandemic that turned a long-term crisis in neoliberalism into a full-blown crisis of neoliberalism and of liberal democracy more broadly. The sharp rise in inflation and decline in real wages in the wake of the COVID pandemic built on decades of trauma and resentment at the destructive, class-biased processes of neoliberalisation to create an incendiary political environment in which the far right has rapidly flourished. These movements tap into multiple generations of painful political and economic restructuring in which power and resources have flowed to the owners of capital and to the wealthiest in society, while workers have suffered. They feed on working-class rage at job losses, shrinking blue-collar employment opportunities, inequality in access to social services, and redundancies across the life cycle. They leverage the processes of neoliberal “depoliticization” and the genuine sense of disempowerment created by economic rules that seemed to privilege owners of capital to point fingers at forces beyond people’s control, such as a “deep state.”
To be sure, the mobilisation of racism has been crucial, most notably blaming migrants for the consequences of decisions actually made by employers and state elites. Here, far-right figures have tapped into years of racist, xenophobic, and nationalistic discourses that had become commonplace among neoliberal governments. The authoritarian right did not create their worldview or discourses from nowhere. They have deployed arguments and tropes that were already central to conservative neoliberalism. So too has the far right drawn on betrayal-by-elites rhetoric that had incubated for decades in neoliberal think tanks such as the Heritage Foundation and given contemporary expression in allegations around “cultural Marxism.”
Yet racist scapegoating and moral panic are not sufficient conditions to explain the rise of the far right. Crucial to this phenomenon is a feeling of betrayal and a desire to punish those held to have done the betraying. The historic violence of neoliberalism, paired with widespread market dependence, fiscal austerity, inflation, oligopolistic pricing, and weak labour market institutions, means that liberal democracy has come to be seen as corrupted—unable to deliver for ordinary people while bending over backward to support the already privileged.
While the rise in popular support for the far right is a reaction against neoliberalism and a symptom of neoliberalism is crisis, the economic orientation of far-right politicians and parties is often a contradictory amalgam of an explicitly anti-neoliberal economic nationalism—see, for example, Trump’s strong support for tariffs, opposition to an independent central bank, and his administration’s purchase of equity stakes in a host of corporations—with a kind of hyper-neoliberalism, including deep cuts to public services.
Anti-fascism
The far right has always been with us. Fascism is not new but rather is a recurring feature of capitalist societies. It gains power in times of economic crisis when democratic institutions are unable to deliver materially and when capitalist crises overwhelm democratic institutions. The current moment is one such time—an interregnum period10 between the neoliberal regulatory order and a new regime that is in the process of being formed. State elites the world over are desperately trying to facilitate conditions for capital accumulation while shoring up general political legitimacy. The two don’t fit neatly together. However, capital is far more likely to tolerate tariffs and partial ownership of industry if profits are buoyed, labour is disciplined, and favourable regulations are enacted. Capitalist social relations can thrive within a range of state forms, from authoritarian to democratic. And it is little surprise that across the world, the far right is strongly supported by fractions of big capital, especially from extractive industries, like big tech and the armaments industry. Such support is crucial for fascists and authoritarians to be able to expand their movements and maintain state power.
For the Left, the dilemma of a viable politics is different. On the one hand, many centre-left parties continue to cling doggedly to neoliberal forms of governance. This is partly a function of the durability of neoliberal mental modes but also of the centre-left’s close ties to capital and fear of capital rebellion of various types—capital flight, bond sell-offs, campaigns by media owners. The privileged position of capital within the policy-making process sits uneasily with calls for a fairer economic system. For the fascists and authoritarians, this issue is far less problematic.
When in government then, many centre-left parties continue to hew closely to neoliberal programs of public austerity, despite it being the kiss of death for a viable progressive politics. While in opposition, they lament the demise of central bank independence and critique the foolishness of tariffs. It is therefore little wonder that progressive social agendas have become viewed as elitist and that the electoral fortunes of centre-left parties are plummeting precipitously.
There are signs therefore that the only viable political contest today is between a racist, authoritarian, sometimes fascist nationalism and a progressive agenda of decommodification and social protection that rejects neoliberal orthodoxy. There are signs—and that is all that they currently are—of this materialising: in the success of Zohran Mamdani as mayor of New York and of Andy Burnham as UK Prime Minister, or in the fact that active resistance to Trump’s agenda has blunted, though not halted, the advance of fascism in the U.S. Fascism is an even greater threat to workers than neoliberalism, and democracy can only be saved if it is seen to deliver materially for the majority of the population. Appeals to democracy as an abstract concept are unlikely to have much appeal outside of high-paid, knowledge-based sections of the working class. The best chance of defeating fascism and authoritarianism may be with a political agenda that aims to democratise economic processes.
Notes