Neo-liberalism – deregulation, financialisation and globalisation – is not working in the interest of the vast majority of the world’s population? Not only does a new economic model have to be developed, but it has to be made a force capable of change.
Laurie Laybourn-Langton is a Senior Research Fellow at the Institute for Public Policy Research (IPPR), founder and Director of Bring Back the NHS, and a Trustee of Rethinking Economics.
Michael Jacobs is Director of the IPPR Commission on Economic Justice and Visiting Professor in the School of Public Policy at University College London.
Neoliberalism – the set of socioeconomic ideas and policies which have dominated public life over the last 40 years – has failed. In the wake of the global financial crisis of 2008, the results of neoliberalism’s experiment in political economy have been exposed: financially unstable economies generating insufficient investment or innovation to power growth, stagnant or barely rising living standards, sharply rising inequality of income and wealth, and worsening environmental degradation.
Despite the evidence that neither its analyses nor its prescriptions have worked, neoliberalism remains the dominant perspective of most socioeconomic commentary and policy-making
in the UK. It needs to be replaced by a more effective understanding of capitalism and new economic policy prescriptions. Now is the time to do this. More and more economists and commentators – including those in mainstream institutions such as the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) – now acknowledge that neoliberalism is not working.
Public revolts against the impact of austerity policies and of free-market globalisation have fractured political argument in many countries, manifesting in popular movements of both left and right. Though better economic analysis and policy prescription cannot in themselves effect political change, they play a powerful role in encouraging and legitimising it. As economic instability and stagnation persist, and global environmental collapse accelerates, a new paradigm is urgently needed.
This is the report of a project to map organisations and groups in the UK (and some beyond) seeking a change in the socioeconomic paradigm away from neoliberalism, and to assess this movement from an overall strategic perspective. The project was conducted between January and May 2017, over which time we conducted 27 interviews, reviewed over 40 organisations and undertook a review of theories and experience of socioeconomic change. Section 2 sets out the context, exploring how neoliberalism has failed, and the political consequences of that failure. Section 3 analyses past shifts in economic ideas and policies, and argues that the conditions for another are now apparent. Section 4 sets out an overall theory of change as to how this might occur. Section 5 maps the organisations in the UK seeking such a shift and Section 6 assesses this organisational ecosystem from an overall strategic perspective. Section 7 concludes with our recommendations for the future of the economic systems change movement in the UK.