Neoliberalism and the World Economic Essay

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Thus, crises of capitalism have so far avoided provoking the alternative solution of a transition out of capitalism" (Wolffe 2009). Welfare state capitalism is merely one incarnation of capitalism, and neo-liberalism is not such a striking reformation of the capitalist system: it is merely one part of the cycle of managing capitalism without really changing the nature of neoliberal, state-protected capitalism.

While the U.S. government's approach to the crisis may be 'more of the same' of the past twenty years, if not longer, one contrarian view suggests that from a grass-roots level there has been a fundamental shift in terms of the way Americans view prosperity and consumerism, which may have a more fundamental and long-standing effect on the way that corporations function. By reducing spending, Americans have slowed the astounding rate of growth and commercialism of the past twenty years, and by disdaining consumption for the sake of consumption and worship of the ultra-rich as ultra successful, have challenged the neo-liberal notion that success in a hypercompetitive global economy is always deserved. One of the great revelations of recent months has been how rich the 'very rich' really are, and also how little top executive do to deserve their exorbitant salaries and bonuses, compared to average Americans. The demystification of Wall Street and the degree to which the government is complacent in facilitating the growth of enterprise may make Americans far less trusting of politicians who seem overly beholden to the special interests of corporations and may deflate the cache given to entering financial industries.

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Moving money to make money was one of the core principles of neo-liberalism: "large-scale derivative trading is a typically neoliberal phenomenon, although financial derivatives have existed for centuries. It is possible to trade options on shares: but it is also possible to create options on these options. This accumulation of transaction on transaction is characteristic of neo-liberalism. New derivatives are created, to be traded on the new exchanges - such as electricity futures" (Treanor 2009). But although neoliberal societies are network societies, they are not the 'open societies' once promised -- the ability to make money through' transaction on transaction' was dependant upon secrecy rather than openness. The difficulty of keeping track of creative new types of mortgages, futures, commodity prices, and 'spreading' risk to other companies demonstrated how an unwatched market quickly 'boils over.'

The current market has shown an inability to correct itself without government assistance, but rather than extending aid to people, the government has extended aid to financial institutions, in the hope that prosperity will eventually flow towards the public, employ them, and make them want to spend again. Whether this works remains to be seen, but such remedies suggest that radical solutions to the problems that have been building since the real estate bubble burst have not yet been generated. Instead, neoliberal solutions have been given an 'old spin' to manage and correct excesses of the business cycle, but not to fundamentally correct capitalist inequities.

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