current issue

FEDERICO FINCHELSTEIN

AUTHORITARIANISM AND FREE MARKETS: NOTES ON FASCISM, POPULISM, AND ECONOMICS

Is there a link between authoritarian politics and free market economics? How important has economic theory been historically to the rise of authoritarian systems and ideologies? Are fascism and populism determined by economic priorities or economic interests? In this article, I argue that economics was not that important, and certainly not as important as politics was, for fascists and populists. I then address how this is changing in the present cases of wannabe fascist populists such as Donald Trump in the United States and Javier Milei in Argentina.

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MARK W. FRAZIER

CHINA’S NEOLIBERAL AUTHORITARIAN SOCIAL POLICY

China is commonly regarded as a successful alternative to neoliberal economic policy and development strategy. But China’s social policies, which were adopted at a pivotal global moment of postsocialist transition in the 1990s, bear significant traits one would associate with neoliberal economic policy. This article uses the case of old age pensions to support this claim. Pension reforms of the early 2000s transferred unprecedented costs and risks to Chinese households under a new social insurance scheme. Twenty years later, the inherent flaws in financing healthcare and pensions through employer-financed and individualized social insurance have become apparent. The concluding section discusses Xi Jinping’s dominance of Chinese politics and the risks and economic insecurities that have afflicted Chinese society under these neoliberal social policies.

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PRABHAT PATNAIK

EMPLOYMENT AND POVERTY UNDER NEOLIBERAL CAPITALISM

Neoliberal capitalism, characterized by freer movement of goods and services and capital, including finance, across country borders, keeps down real wages everywhere even as labor productivity increases. This raises income inequalities, creating an ex ante tendency toward overproduction, which underlies the current stagnation and growing unemployment in the world economy. This crisis cannot be overcome within neoliberalism, since globalized finance opposes larger state expenditure financed through heavier taxation of the rich or a larger fiscal deficit. This underlies the current pervasive tendency toward neofascism. Overcoming neofascism requires transcending neoliberalism by mobilizing working people around a rights-based welfare state.

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TERESA GHILARDUCCI AND LUDOVICA TURSINI

AMERICANS’ DOWNWARD MOBILITY SHIFTS VOTES TO THE RIGHT

A decline in a person’s economic security relative to that of their relatives, neighbors, and any other group used by people in comparing themselves is correlated with emotional states of loss, anger, anxiety, and decline in subjective well-being. Using publicly available data on voting patterns for 910 selected counties in the United States in four presidential election cycles (2008, 2012, 2016, and 2020), we find that if people in a county experience downward mobility in relative economic security, the county that was once majority Democratic would likely shift to majority Republican voting. This evidence suggests that the fear of loss of relative economic security is associated with voting for authoritarian candidates and agendas.

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MARIANA MAZZUCATO AND LORENZA MONACO

RETHINKING INDUSTRIAL STRATEGIES AND THE STATE: A GLOBAL SOUTH PERSPECTIVE

After decades of opposition and neglect in the context of a dominating neoliberal approach to markets and institutions, industrial policy has experienced a renaissance. In the wake of financial, climate, and health crises, setting a sound industrial strategy has emerged as an absolute policy priority. Yet contemporary industrial strategies remain bound by outdated frameworks and preconceptions. Those shaped by the Global North in particular fall short of addressing the unique challenges Global South countries face, including limited state capacity, dependence on volatile global markets, and colonial legacies. These factors necessitate a radical rethinking of industrial strategy. The article argues that to avoid reproducing the mainstream view of state intervention, industrial strategy should fundamentally rethink the role of the state—not as a market fixer, but as a capable and confident market shaper.

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RICHARD MCGAHEY

INDUSTRIAL POLICY: POPULIST AND PROGRESSIVE

In contrast to neoliberal economic policy that favors markets, the United States has seen a revival of explicit industrial policy, with government playing a significant directive role in key industries. Surprisingly, industrial policy has support from both the left and the right, creating debates both within and between America’s two major parties. Progressives and authoritarians both support some specifics of industrial policy, especially those aimed against China. But overall industrial policy differs sharply between these opposing political movements. Progressives align industrial policy with pro-union, climate-focused, and race and gender equity programs. In contrast, authoritarian industrial policy is part of a larger anti-union, anti-immigrant, and pronatalist agenda. Hence, agreement among progressives and authoritarians over specifics of industrial policy should not mask very deep disagreements on overall policy frameworks.

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HANS KUNDNANI AND WILLIAM MILBERG

CAN DEMOCRACY BE SAVED BY ECONOMIC POLICY? THE BURDEN OF BIDENOMICS

Heightened economic insecurity has been a factor in the turn to right-wing authoritarianism in the United States and elsewhere. “Bidenomics” has been framed to suggest economic policy can create movement away from right-wing authoritarianism toward more liberal democratic sentiment. We distinguish the crisis of democracy from the rise of populism. We argue that Bidenomics may reduce the appeal of populism if it targets those “left behind,” but addressing the crisis of democracy is a burden Bidenomics alone cannot bear. To raise the likelihood of buy-in to democracy, there must be significant political change as well.

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MARTIN GUZMAN, YANNE HORAS, ANAHÍ WIEDENBRÜG, AND MAIA COLODENCO

THE RELATIONSHIP BETWEEN SOVEREIGN DEBT AND POLITICS

With the rise of bonded private debt over the past 15 years, there is an increased dependency on private creditors for sovereign nations that borrow to finance their government activities. The power of private creditors gained through increased sovereign debt burdens is affecting the internal political dynamics of these borrower countries, especially in the Global South, including Latin America. A larger external debt burden creates internal political conflict around the distribution of benefits, so debt is intimately linked with politics. Standard economics literature ignores this problem by hypothesizing markets based on perfect competition. We outline a set of hypotheses regarding the relationship between creditors’ political preferences in sovereign debt markets that feature “power rents,” when relatively powerful foreign investors can obtain significantly higher returns by lending to smaller, weaker nations. Bringing power asymmetries into the debt discussion, we also present a research agenda for economics and political science.

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WILLIAM MILBERG, THOMAS LIESS, AND MICHAEL TEDESCO

GLOBALIZATION AFTER DE-GLOBALIZATION

Globalization began in the late 1970s, shifted into “hyperglobalization” in the first decade of the twenty-first century, hit “peak globalization” around 2011, and has in the past 10 years given way to “de-globalization,” characterized by nationalism and protectionism. The rules of globalization were built on a theory of competitive markets, while the world was in fact riven with growing asymmetries of power and a strong policy bias toward capital. This bias must be eliminated if the global economy is to become more democratic and sustainable as we emerge from this moment of de-globalization.

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JESSICA PISANO

THE EVOLUTION OF ILLIBERALISM: NECROPOLITICAL ECONOMIES AND A DEMOCRATIC ANTIDOTE

Illiberal regimes exhibit a political economy in which people’s continued access to welfare protections depends on loyalty to incumbent politicians. Their politicians’ invocation of xenophobic tropes suggests a clear boundary between loyal lives that matter to the regime and those that do not, yet some illiberal regimes have come to promote a materialist necropolitics, devaluing human life not only outside the imagined boundaries of the demos, but also within it. By adopting approaches that explicitly recognize the value of individual human life, democracies can successfully hold on to societal buy-in to democratic forms of government even amid the spread of illiberalism.

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MARK SETTERFIELD

MANAGING THE DISCONTENT OF THE LOSERS REDUX: A FUTURE OF AUTHORITARIAN NEOLIBERALISM OR SOCIAL CAPITALISM?

Neoliberalism eviscerated the value-sharing ethos of the postwar golden age (1945–1973), seeking to maintain social cohesion in civil society by “managing the discontent of the losers”: reconciling working households to the realities of the neoliberal labor market by means of coercion, distraction, and debt accumulation (the last serving to limit the growth of consumption inequality in the face of burgeoning income inequality). The global financial crisis undermined the process of household debt accumulation, creating a crisis of neoliberal accumulation. Key to the institutional renewal required to address this crisis is managing the discontent of the losers inherited from the neoliberal era. One possibility is authoritarian neoliberalism, which involves amplification of the “coerce and distract” elements inherited from the previous regime. The alternative is social capitalism: a renewal of social democracy that eliminates the discontent of the losers and so reduces both the need and desire for illiberalism.

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