Never Let a Serious Crisis
Go to Waste
How Neoliberalism Survived
the Financial Meltdown
Philip Mirowski
To neoliberals of all parties
Contents
The Crisis That Didn’t Change Much of Anything
Neoliberalism as Thought Collective and Political Program
4. Mumbo Jumble
The Underwhelming Response of the Economics Profession to the Crisis
5. The Shock of the New
Have Neoclassical Economists Learned Anything at All from the Crisis?
6. The Red Guide to the Neoliberal Playbook
Afterword: Thirteen Ways of Looking at the Crisis
Notes
Bibliography
Index
Copyright
4.1 Average profit per employee, United States
5.1 Economist salary differentials, by academic sector
1.1 Hilarity at the Federal Reserve
2.1 Growth of MPS-affiliated think tanks
2.2 MPS founding meeting, national representation
2.3 MPS 1991 membership, national representation
2.4 Mentions of Friedrich Hayek in various English-language sources
4.1 Corporate profits/U.S. GDP
4.2 Index of world equity prices, Great Depression and current crisis
4.3 Index volume of world trade, Great Depression and current crisis
4.4 Google Trends search term: “toxic assets”
4.5 Fed projection misses the mark
4.6 American bank mergers, 1995–2009
4.7 The “Flash Crash” of May 6, 2010
5.1 Proportions of U.S. mortgages originated by various financial entities, 1953–2007
6.1 European ETS prices, 2011
6.2 European public and private debt, 2000 and 2010
6.3 U.S. public and private debt, 1920–2011
6.4 Total Over-the-Counter Outstanding Derivatives
6.5 Google Trends for search term “financial innovation”
The Crisis That Didn’t Change Much of Anything
Conjure, if you will, a primal sequence encountered in B-grade horror films, where the celluloid protagonist suffers a terrifying encounter with doom, yet on the cusp of disaster abruptly wakes to a different world, which initially seems normal, but eventually is revealed to be a second nightmare more ghastly than the first.1 Something like that has become manifest in real life since the onset of the crisis which started in 2007. From the crash onward, it was bad enough to endure house prices sinking under water, dangling defaults and foreclosures, the collapse of what remained of manufacturing employment, the reduction of whole neighborhoods to bombed-out shells, the evaporation of pensions and savings accounts, the dismay of witnessing the hope of a better life for our children shrivel up, neighbors stocking up on firearms and people confusing bankruptcy with the Rapture. It was an unnerving interlude, with Nietzschean Eternal Return reduced to an Excel graph with statistics from the Great Depression of the 1930s.
Fast forward to 2011. Whether it was true or not, people had just begun to hope that things were finally turning around. Moreover, journalists in mainstream publications bandied about the notion that academic economics had failed, and hinted that our best minds were poised to rethink the doctrines that had led the world astray. Yet, as the year grew to a close, it slowly dawned upon most of us that the natural presumption that we were capable of rousting ourselves from the gasping nightmare, that we might proceed to learn from the mistakes and fallacies of the era of Neoliberal Follies, was itself just one more insidious hallucination. A dark slumber cloaked the land. Not only had the sense of crisis passed without any serious attempts to rectify the flaws that had nearly caused the economy to grind to a halt, but unaccountably, the political right had emerged from the tumult stronger, unapologetic, and even less restrained in its rapacity and credulity than prior to the crash.
In 2010, we were ushered into a grim era of confusion and perplexity on the left. It took a rare degree of self-confidence or fortitude not to gasp dumbfounded at the roaring resurgence of the right so soon after the most dramatic catastrophic global economic collapse after the Great Depression of the 1930s. “Incongruity” seems too polite a term to describe the unfolding of events; “contradiction” seems too outmoded. Austerity became the watchword in almost every country; governments everywhere became the scapegoats for dissatisfaction of every stripe, including that provoked by austerity. In the name of probity, the working class was attacked from all sides, even by nominal “socialist”
