After privatised Keynesianism

Document type
Paper
Author(s)
Colin Crouch
Publisher
Compass
Date of publication
16 November 2008
Series
Thinkpiece; 41
Subject(s)
Social Policy
Collection
Social welfare
Material type
Reports

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This paper reviews Keynesian economic theory and argues that recent policy has been based on 'privatised Keynesianism' rather than neoliberalism. The author outlines the global politico-economic system since the second World War, with a focus on developments since the 1980s. The reliance on widespread unsecured debt which was vital to economic growth since this period contributed to the financial crisis of 2008. Once privatised Keynesianism had become a model of general economic importance, it became a curious kind of collective good. Given that necessary to it was irresponsible behaviour by banks in failing to examine their asset bundles, that very irresponsibility became a collective good. This in itself explains why governments had to bail out the firms involved, nationalising privatised Keynesianism. The paper goes on to address the question of how capitalism and democracy are to be reconciled now, and looks at the right, left and 'third way' political responses.

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