Neoliberalism, Globalization, Financialization: Understanding Post-1980 Capitalism by David M. Kotz Department of Economics, University of Massachusetts Amherst School of Economics, Shanghai University of Finance and Economics Email Address:
[email protected] August, 2015 This paper is a revised version of chapter 2, “What is Neoliberalism,” of The Rise and Fall of Free-Market Capitalism, Harvard University Press, 2015. 1 While it is widely agreed that capitalist economies underwent significant change after around 1980, there are different interpretations of the new form of capitalism that emerged. Even among heterodox economists, there is no agreement about the best organizing concept for post-1980 capitalism – is it globalization, financialization, or neoliberalism? Or is it best understood as simply capitalism? These different understandings of contemporary capitalism have implications for our analysis of the financial and economic crisis that emerged from it in 2008 and for the means by which this crisis could be resolved. This paper utilizes a social structure of accumulation (SSA) approach to present a case that the concept of neoliberalism is the most useful characterization of post-1980 capitalism. Focusing on the United States, with secondary attention to the global system, it argues that neoliberalism is not just an economic theory or policy approach, but a coherent system of economic ideas and economic, social, and political institutions, as well as a particular form of the capital-labor relation and of relations within capital.1 Neoliberal restructuring began in the U.S. under a Democratic Party Administration, that of President Jimmy Carter, in the late 1970s. While it intensified under the succesive Republican Administrations of Ronald Reagan and George H.