A New Progressive Political Economy
The 2008 financial crisis revealed major flaws in neoliberal capitalism, and the last 35 years have shown that the neoliberal model has not performed well relative to the previous 30 years in terms of economic growth, financial stability, and social justice. The time has come for a credible progressive alternative.
LONDON – In an article in Foreign Affairs entitled “The Future of History,” Francis Fukuyama pointed out that, despite widespread anger at Wall Street bailouts, there has been no great upsurge of support for left-wing political parties. Fukuyama attributed this – rightly, I believe – to a failure of ideas.
The 2008 financial crash revealed major flaws in the neoliberal view of capitalism, and an objective view of the last 35 years shows that the neoliberal model has not performed well relative to the previous 30 years in terms of economic growth, financial stability, and social justice. But a credible progressive alternative has yet to take shape.
What should be the main outlines of such an alternative? First, a progressive political economy must be based on a firm belief in capitalism – that is, on an economic system in which most of the assets are privately owned, and markets largely guide production and distribute income.