Abstract
Neoliberalism, its background, essence, and consequences, has already been the subject of multiple studies. The book Neoliberal Resilience is the first significant work devoted to the relationship between the mechanisms that made neoliberalism sustainable and viable on the one hand and that led to the erosion of democracy on the other. To conduct his research, Aldo Madariaga chose four countries that were once regarded as leading examples of effective implementation of neoliberal policies: Chile, Argentina, Poland, and Estonia. Explaining this choice in Chapter 1, the author indicates that despite the universal nature of neoliberalism and its recipes for politics, the actual practice of neoliberalism at the core and on the periphery of global capitalism was totally different. In the developed capitalist countries, neoliberalism evolved gradually as a greater or lesser challenge to postwar political and economic institutions. On the periphery, however, particularly in Latin America and Eastern Europe, the implementation of neoliberalism was rapid, large-scale, and led to radical economic and political reforms.
In Chapters 3 and 4, analyzing the first mechanism regarding support for neoliberalism granted by various economic and political groups, the author focuses on two important areas of economic policy, namely, exchange rate policy and industrial policy. The performed quantitative and qualitative analysis showed specific solutions applied by individual countries in both areas. The analysis also illustrates that in all four countries, capital in the financial sector as well as other competitive sectors of the economy has favored neoliberalism and has become its ardent defender.
In all the countries surveyed, the privatization of state-owned assets was of key importance for creating business support for neoliberalism. It was implemented in a way that limited the possibilities of shaping a business base for development projects in ways other than being in step with neoliberalism, and thus it restrained the emergence of alternative social blocs that could undermine neoliberal politics. Therefore, as Madariaga rightly remarks, it is not surprising that privatization was an important point in market reform programs implemented under the auspices of international financial institutions. He also emphasizes that the support for neoliberalism gained through privatization strengthened neoliberal blocs and weakened the possibility of creating alternative alliances. That support also limited political space for governmental policymaking because of the need to take into account neoliberal businesses’ preferences, which further contributed to the erosion of representative democracy. It is worth noting, however, that while analyzing privatization, the author did not pay any attention to privatization of pensions, which in the examined countries was for neoliberals their flagship project. Almost full privatization of the pension system, as in Chile, or partial as in the other three countries, significantly strengthened the financial sector. As a result, its ability to influence the shaping of state policy in line with its interests significantly increased.
Considering the mechanism of blocking the opposition averse to neoliberal politics, the author identified and analyzed ways to reduce political representation of opponents of neoliberalism and their influence on the state policy. Except for changing electoral rules or vetting (in Eastern Europe), an important course of action in this area was the reduction of political representation of the workforce, particularly by weakening trade unions, reducing the role of collective bargaining, and increasing labor market flexibility. In sum, by gaining support from business and blocking actions of opponents, neoliberals acquired the ability to control the trajectory of public policy.
The third key mechanism of building the resilience of neoliberalism was consolidating principles and solutions preferred by neoliberals by including them in high-rank legal acts, for example, the constitution. This approach was to create a barrier hindering the departure from neoliberal politics, even when neoliberals would not be in power. The main measures adopted by the four countries studied to achieve the above include ensuring the independence of central banks and establishing rules to discipline fiscal policy, which the author analyzed thoroughly. It should be emphasized, however, that the author did not attempt to show an alternative to these solutions or its potential consequences. This point is important because in the past the studied countries were often affected by high inflation and huge public debt, which made some of them insolvent and suffer from a serious economic crisis.
For all three mechanisms the author aptly showed not only how neoliberals sought to institutionalize their preferred solutions as state policy but also how they tried to change the very rules of the democratic political game in order to increase their political power and to reduce the power of their opponents.
At the end of the book, the author considers how neoliberal resilience might affect the future of democracy, highlighting in particular the threats posed by the populist radical right. He emphasizes that in all four countries surveyed, right-wing parties have so far been active in shaping their domestic policy. The author demonstrates his insightful view in his observations on Poland. He indicates that in recent years, right-wing governments have repeatedly violated the rules of democracy, including limiting the independence of the justice system. At the same time, these governments have generally not withdrawn from the neoliberal economic model, nor have they decided to move toward an alternative model (p. 262). Madariaga’s concerns about the future of democracy are based on the assumption that, despite their rhetoric, neoliberals and big business have never really been interested in competitive markets or in strengthening the democratic system. Moreover, the author observes that businesses favor populist governments, because their leaders not only change little of the status quo advantageous to businesses but also introduce new privileges for them. It is worth emphasizing, however, that in his discussion on the threat to democracy arising from the growing role of right-wing populism, the author generally ignored the fact that the significant increase in social inequality caused by neoliberalism created fertile ground for the development of this populism. It is social inequality that helps anti-democratic forces come to power, which, under the slogans of correcting neoliberal errors, are in fact aimed at strengthening their influence by destroying the democratic order.
Neoliberal Resilience makes a significant contribution to the ongoing debate about the role neoliberalism has played in politics and the economy, and why it has been able to survive almost unchanged in some countries. In addition to the theoretical analysis, the book contains numerous empirical data, which the author methodically analyzed and assessed. What is more, he conducted numerous interviews with government representatives, advisers, as well as scientists (a list is at the end of the book) from the countries studied. These interviews provide readers with information obtained directly from those involved in the process of shaping the policy pursued by individual countries or from the people who were close observers of this process. This feature makes it easier to understand how neoliberalism was able to trigger fundamental changes in the economy and politics. This fascinating book explains the mechanisms for the resilience of neoliberalism and emphasizes the threats to democracy that the implementation of neoliberal ideology in practice has already created and which it may create in the future.