Levy lecture 28th November[1]

Levy lecture 28th November[1] - Levy lecture 28th November...

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Levy lecture 28 th November The neo-liberal challenge Thatcher: TINA. Neo-liberal reform is the only way to go. Britain was indeed revived through combination of privatization, deregulation, weakening of trade unions… But the reforms were anything but painless. Increases in poverty, inequality, also social problems like crime, drugs, violence. Friedman: similar view. Golden straightjacket. Two main predictions: 3. convergence between different countries, inc US and Europe. Eg Britain becoming more like US. 4. convergence between parties of Left and of Right. Eg Miterrand tried to go his own Leftist way, but had to backtrack (even in a country where the state had shown great ability to steer econ). Turning from theory to practice, a number of center-right parties/govts have been convinced. Because… 5. ideology: they like the idea of need for more markets 6. electoral interests: neo-liberal reforms associated with increased inequality, upward redistribution of wealth, ie toward people who vote for parties of the right (reward one’s constituents) But still, neo-liberalism hasn’t had much success in Europe outside of Britain. Two obstacles: 7. political power. To free up markets, one needs to project a lot of govt power against the forces that block de/reregulation eg unions, clubby set-ups between bankers. British case unusual in that Thatcher possessed this power: few/no veto points. Most countries 1) have a written constitution, 2) have system of PR and hence typically coalition govts. So even if they have an authoritarian personality like Thatcher, other European leaders may not be able to change things as she did. Eg Berlusconi very rich and influential in early 1990s; saw himself as similar to Thatcher or Reagan. But he was PM in 1994 at head of a 3-party govt. He tried to reform the WS; ram through cuts in pensions without consulting with TUs or opposition. The unions put 2m protestors out (the largest demos since Mussolini) a few times, until Berlusconi was forced to withdraw reform because his coalition partners were nervous; a week later they dumped him anyway. 8. Public opinion: welfare retrenchment isn’t popular. It tends to be an exercise in blame avoidance. Public opinion may support reform in the abstract, but as soon as specific proposals are made a lot of resistance. In fact, in most European countries, people don’t even support reform in the abstract. And, center-right parties in Europe tend not to be neo-liberals – Christian Democrats instead. Not free-marketeers. In France, even, the conservatives ran the ultra-interventionist
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Levy lecture 28th November[1] - Levy lecture 28th November...

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