End of the Neoliberal Age
By Hannes Koch
[This article originally published in: die tageszeitung, September 22, 2001 is translated from the German on the World Wide Web, www.taz.de.]
The market economy is astonishingly unstable. Three collapsed old buildings are enough to bring the world economy to the edge of a greater crisis. The stock market course suffers a severe setback. Firms dismiss hundreds of thousands of employees. From one week to the next, business cycle prospects appear far more depressing than before, not only in the US. The confidence that the forces of the market develop their healing effect by themselves also disappears with this experience. At the latest since the attacks on the US, neoliberal economic policy has its best time in the past.
Market liberals are on the defensive considering the attacks on the US and their consequences. Even in the homeland of the neoliberal thinker Milton Friedman, people are discussing a state-financed business cycle program so the economic crisis does not intensify. The US government has already resolved billions in subsidies for the nearly bankrupt airline carriers. One could dismiss all this by saying that businesses demand state assistance in bad times while they want to keep every dollar for themselves in good times. Still more is involved. In the crisis, the neoliberal concept of politics proves to be a fair weather theory. With external shocks, whether political, cultural or natural, the market falls out of balance and can only be stabilized by political interventions. Liberal economists usually maintain the opposite: the market economy regulates itself if it is only given enough freedom.
We are witnesses of a paradigm shift that was already on the way. A manager like the Porsche head Wendelin Wiedeking refuses to publish quarterly figures of his firm in order not to hand over the value of the firm to short-term manipulation and speculation on the deregulated financial markets. After several international financial crises, the suspicion creeps up on the International Monetary Fund that free trade alone is not enough. The erosion of the neoliberal economic theory is underway. The political and economic crisis phenomena caused by the airplane attacks will accelerate this process.