ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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State, Market, the Public in the 21st Century

[The following are extracts from the statement issued at the seventh forum of the World Association of Political Economy held in Mexico City, 25-27 May.]

History shows that capitalism, in every stage of its development, periodically produces severe economic crises. The great recession that began in 2008, the financial crisis of 2008 and the eurozone crisis that began in 2010 were all the result of 30 years of neo-liberal capitalism. They represent a major opportunity to defeat neo-liberalism and inaugurate a new age of expanding the public and state sectors in ways that will contribute to human development. Although in the wake of these crises neo-liberalism took the new form of “austerity”, which represents an all-out attack on working ­people, popular protest soon followed, from the progressive uprisings in the Arab world to the occupy movement to the current unrest and wave of electoral upsets faced by governments imposing austerity in Europ.

Three decades of neo-liberal dominance shrank the size and reduced the quality of the progressive aspects of the public sphere and state sector, while also worsening the ecological crisis. Neo-liberals dogmatically insist that the state and public sectors are inefficient and only markets and the private sector are capable of creating growth, employment, development and human welfare. Nothing could be farther from the truth. That capita­lism’s so-called golden age was contemporaneous with the apogee of progre­ssive forms of public and state sector ­expansion under the momentum of popular mobilisation the world over was hardly coincidental. Nor has the rollback of these historic popular gains resulted in greater growth and prosperity as claimed by neo-liberals. Instead, the ­actual results of their policies have only benefited big capital, particularly financial capital, the monopolising military-­industrial groups, and the very rich. For the rest, the results have only been ­economic stagnation or even decline, misery, unemployment and often precipitous ­declines in human welfare.

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