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The Rise of Neoliberalism in Advanced Capitalist Economies Also by M.C The Rise of Neoliberalism in Advanced Capitalist Economies Also by M.C. Howard and '.E. King THE POLITICAL ECONOMY OF MARX A HISTORY OF MARXIAN ECONOMICS, VOLUMES I AND II THE ECONOMICS OF MARX (eds) Books by M.C. Howard CLASSICAL AND MARXIAN POLITICAL ECONOMY (ed.) MODERN THEORIES OF INCOME DISTRIBUTION PROFITS IN ECONOMIC THEORY Books by J.E. King RELATIVE INCOME SHARES TEN PER CENT AND NO SURRENDER: The Preston Strike 1853--4 ECONOMIC EXILES LABOUR ECONOMICS A HISTORY OF POST KEYNESIAN ECONOMICS SINCE 1936 The Rise of Neoliberalism in Advanced Capitalist Economies A Materialist Analysis M.e. Howard Department ofEconomics, University of Waterloo, Canada J.E. King Department ofEconomics and Finance, La Trobe University, Australia palgrave macmillan © M.e. Howard and J.E. King 2008 Softcover reprint of the hardcover 1st edition 2008 978-0-230-53703-3 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the * Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London wn 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2008 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin's Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 978-1-349-35877-9 ISBN 978-0-230-58392-4 (eBook) DOl 10.1057/ 9870230583924 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging. pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Howard, Michael Charles, 1945-- The rise of neoliberalism in advanced capitalist economies:a materialist analysis/M.e. Howard, J.E. King. p. cm. Includes bibliographical references and index. ISBN 978-1-349-35877-9 (alk. paper) 1. Neoliberalism. 2. Capitalism. 3. Economics-History. I. King. J. E. Oohn Edward) II. Title. HB95.H69 2007 330.12'2-dc22 2007050060 10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 12 11 10 09 08 Transferred to Digital Printing 20 II Contents Preface vi Introduction 1 Part I Historical Materialism: A Theory of Economic Systems 1 A General Theory of Economic Systems 15 2 A Theory of Capitalist Economic Systems 42 Part II Theorists of Modern Capitalism on the Decline of the Market 3 Marx and the Marxists on the Decline of the Market 77 4 Neoclassicals, Keynesians and Heterodox Economists on the Decline of the Market 113 Part III Neoliberalism and Modern Capitalism 5 Market Elimination in Modern Capitalism: Where the Theorists were Right 147 6 The Return of the Market: Where They All Went Wrong 162 Part IV Neoliberalism: Past, Present and Future 7 Why Was Neoliberalism Delayed? 193 8 What Might Reverse Neoliberalism? 221 Notes 245 References 272 Name Index 302 Subject Index 310 v Preface The argument made in this book concerning the causes of neoliber­ alism in advanced capitalism appeared first in an article with the same title, which was published in International Papers in Political Economy in 2002. The argument has now been considerably refined and signific­ antly buttressed but it remains the same argument: the most persuasive account of neoliberalism in advanced capitalist economies is provided by historical materialism. In writing both the article and this book, we have accumulated a large number of debts to people who provided us with comments on what we wrote, and to organisations who supplied funding and facilities to support the writing. We thank Richard Bodell, Tom Bramble, Jim and Tiina Brox, Christina Fader, John Henry, Ed Kaptein, Ramesh Kumar, Euclid Tsakalotos and Mary Ann Vaughan for comments. We also thank the Social Science and Humanities Research Council of Canada for providing a research grant aiding the completion of the book, and The Netherlands Institute for Advanced Study in the Humanities and Social Sciences for accepting Michael Howard as Fellow in Residence for the academic year of 2004/5, during which many of the chapters were written. The argument as a whole, and several components of the argument, were presented to various audiences at conferences and universities in Australia, Cuba, several European countries, the United States and the United Kingdom during the past 7 years, and we are grateful to the parti­ cipants for their observations and criticisms. Very great thanks are also due to Donna Schultz of the Department of Economics at the University of Waterloo, who provided extensive secretarial services and always with great efficiency and good humour. Michael Howard John King vi .
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