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From the Neoliberal crisis to a new path of development

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  • Russo, Alberto

Abstract

In our view, the causes of the crisis are tied to the political change towards a Neoliberal phase from the 1970s on: a wide process of “deregulation” – from the labour market to the globalisation of production, from the national to the international finance – has allowed a partial recovery in the profitability of the capitalist system, contrasting the post-war decline of the profit rate which led to the 1970s “stagflation”. The same key elements of the Neoliberal model – deregulation, financialisation, globalisation – have eventually led to a large crisis as a result of the huge increase of inequality, financial instability, and trade imbalances. In this perspective, the “financial crisis” is the signal of underlying problems concerning the global process of capital accumulation. It is now necessary to support a recovery of the public intervention (“top down”) in order to create the conditions for an economic restart that, in turn, would strengthen the construction of a radical alternative (from the “bottom up”) to the Neoliberal course. A wider access to education should be the key to this progressive strategy aimed at supporting a more egalitarian and green path of development. A radical rethinking of bequest taxation and, in general, of the taxation on wealth would have a clear symbolic value in this perspective, providing, at the same time, the material basis for extending the right to a “universal education”.

Suggested Citation

  • Russo, Alberto, 2012. "From the Neoliberal crisis to a new path of development," MPRA Paper 38004, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38004
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    File URL: https://mpra.ub.uni-muenchen.de/38004/2/MPRA_paper_38004.pdf
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    References listed on IDEAS

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    1. Gatti, Domenico Delli & Gallegati, Mauro & Greenwald, Bruce C. & Russo, Alberto & Stiglitz, Joseph E., 2012. "Mobility constraints, productivity trends, and extended crises," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 375-393.
    2. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, Elsevier.
    3. Staffolani, Stefano & Valentini, Enzo, 2007. "Bequest taxation and efficient allocation of talents," Economic Modelling, Elsevier, vol. 24(4), pages 648-672, July.
    4. Merih Uctum & Sandra Viana, 1999. "Decline in the US profit rate: a sectoral analysis," Applied Economics, Taylor & Francis Journals, vol. 31(12), pages 1641-1652.
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    Cited by:

    1. Thomas Goda, 2013. "The role of income inequality in crisis theories and in the subprime crisis," Working Papers PKWP1305, Post Keynesian Economics Study Group (PKSG).
    2. Thomas Goda, 2017. "A comparative review of the role of income inequality in economic crisis theories and its contribution to the financial crisis of 2007-2009," REVISTA FINANZAS Y POLÍTICA ECONÓMICA, UNIVERSIDAD CATOLICA DE COLOMBIA, vol. 9(1), pages 151-174, February.

    More about this item

    Keywords

    capital accumulation; deregulation; crisis; austerity; public intervention;

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
    • G01 - Financial Economics - - General - - - Financial Crises

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