With the rise of neoliberalism in 1980s, state’s role on the economy was tried to be redesigned. Instead of Keynesian state’s proactive role, neoliberals, in theory, aimed at limited state intervention which mainly focused on protection of property rights, individual liberty, ensuring free trade and a functioning market. Since then, however, the actual practices and outcomes of neoliberalism have been diverged from the theory. To provide an accurate explanation on why this has happened necessitates a historical perspective from the very beginning.
May 12, 2015
April 20, 2015
History, assumptions, criticism and an evaluation from a theoretical perspective
The Great Depression of 1929 has changed the way of economic thinking and the role of state on economy to a great extent. Keynes, at that time, objected to the supply driven classical liberal views and suggested that state must come up with an active economic policy response and intervene when and if there is a market failure. Between 1930s to late 1970s, Keynesian policies (state-led economic growth) and practices (import substitution) became the corner stone of economics. However, by 1970s there were several economic bottlenecks arising from oil shocks, inefficient production (mostly by state owned enterprises) as well as the gold standard. This has led to rise of the new laissez-faire economic thought which has been generally called neoliberalism.
April 14, 2015
Factors affecting the characteristics and direction of capital and capitalist development are important areas of discussion. Some views emphasise the class struggle and its effect on certain types of development while others underline inter-state relations as a departure point.
Focusing on the periodisation of the capitalist state form, Clarke, for one, argues that competition pressure on individual capitals and constant tendency to develop productive forces are main driving forces for over accumulation. They usually lead to development of world markets, generalisation of capitalist social relations of production, over-accumulation and uneven development of capital. To him, class character (and hence struggle) of the state is what is crucial since the subordination of the state to the rule of money and law confines the state within the limits imposed by the accumulation of capital on a world scale. He also admits that state’s ability to alleviate political impact of capitalist contradictions is closely related to the form of the international state system (and thus characteristics of capitalist production) whether it is a mercantilist, liberalist or an imperialist one.