MaxPo Think Notes


Destabilizing Orders: Understanding the Consequences of Neoliberalism – an international conference in Paris

Throughout the long post-war period, crisis was a conjectural phenomenon, exceptional in the normalcy of growth and social progress. Many key concepts of the social sciences – indeed, our understanding of democracy, of embedded markets, of enlightened electorates, benevolent political elites and problem solving progressive alliances – seem inapt for understanding the societal upheaval currently witnessed. In the wake of the financial crisis of 2008, we have witnessed the breakdown of majority alliances, the return on a grand scale of populism both in the Western world and globally, and the eruption into chaotic and sometimes violent protest of new patterns of social mobilization. The forces that underpinned the settlements of welfare capitalism seem obsolete in the face of financial and political elites that are paradoxically both disconnected from national territories and sometimes in direct alliance with nationalist and populist movements. Politics of resentment, politics of place, and new politics of class interact in ways that we do not yet understand. Perhaps the greatest paradox of all, neoliberalism has spawned authoritarianism. At the same time, these processes are not at all new, but must be put in the context of the socioeconomic and cultural cleavages produced by the shift to neoliberalism since the 1970s.   

On January 12 and 13 2018, twenty outstanding scholars met at MaxPo to discuss these issues during two intense days, thus celebrating the five years of Franco-German collaboration in financial sociology and political economy that MaxPo represents. We asked each scholar not to prepare a conventional paper, but rather, a short thinknote, and its now our pleasure to publish these notes in our working paper series and in collaboration with the Society for the Advancement of Socio-Economics. The first paper, Political Economy in an Age of Permanent Austerity, will be followed by two more, The Social Worlds of Neoliberalism) and Social Science at the Crossroads. Keep an eye on the MaxPo site for the full discussion papers.

We are delighted to make the conference contributions accessible to the wider scholarly and general public in this condensed form.

Jenny Andersson Jens Beckert Martha Zuber
Olivier Godechot Lucio Baccaro SASE
Allison Rovny MPIfG, Cologne  
MaxPo, Paris    

 

Section 1: Political Economy in an Age of Permanent Austerity

Mark Blyth
Brown University

"How the Menu Gets Set: Permanent Austerity, Political Parties, and Growth Regimes"

Extract

The result of cartel parties lacking the capacities to intervene in the macroecononomic environment has been the survival of a party form that is mal-adapted to its environment and is therefore unable to ‘change the menu’ that it has been offering for the past three decades. Populism and the collapse of center party vote shares are the twin results…

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Will Davies
University of London

"Sabotaging Progress: The Cultural Economy of Resentment in Late Neoliberalism"

Extract

The cultural and moral logic of neoliberalism has long sought to play up the zero-sum qualities of capitalism, as a way of motivating individuals, and as a way of thwarting collectivist ideals of progress, as lay at the heart of Keynesianism. Sabotaging visible ‘winners’ is not an irrational or emotional strategy, indeed it’s exactly how firms like Uber or Facebook set about growing as they did. It is a quest for moral and cultural value, in a society without any authoritative measures of value, beyond competition itself.

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Jacob S. Hacker & Paul Pierson
Yale University and University of California, Berkeley

"America’s Peculiar Mix of Plutocracy and Populism"

Extract

Why is the “populism” of U.S. President Donald J. Trump turning out to be so plutocratic? Why have the two biggest 2017 Republican policy drives—the failed attempt to “repeal and replace” the Affordable Care Act and the hugely regressive tax legislation recently signed into law—both turned out to be radically inegalitarian, with particularly dire effects for Trump’s most loyal voters? Why have Trump’s populist campaign promises and appeals mostly been jettisoned except as rhetorical flourishes to sustain his electoral base?

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Colin Hay
Sciences Po - Paris

"Brexit & the (Multiple) Paradoxes of Neoliberalism"

Extract

What is clear about Brexit to anyone who has studied it, and probably to most of those who have not, is that it is paradoxical and contradictory. Here I draw out, as it were, the neoliberal paradoxes of Brexit – ten of them.

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Donald MacKenzie
University of Edinburgh

"The Mundane Political Economy of Finance"

Extract

The second reason I would cite here for the importance of the mundane political economy of finance is its contribution to excessive rewards and profits within the financial system and excessive costs to the wider economy. One of the most important recent contribution to our understanding of this is Thomas Philippon’s painstaking historical analysis of the efficiency of the US financial system, and his shocking finding (see figure on p.4) that the system shows no consistent tendency to become more efficient through time (American Economic Review, 2015). It’s a finding interrelated with finance’s effects on inequality: in a crude, rough interpretation, all the gains in the efficiency of the information and communications technologies underpinning finance (from the epoch of clerks writing on paper ledgers by gas light onwards) have captured, mainly in the form of the high incomes of well-placed intermediaries. That’s precisely the kind of thing that the mundane political economy of finance needs to investigate and explain.

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Gerassimos Moschonas
Panteion University

"Global Markets, European Constraints: The Long Destabilisation of Social Democracy in Historical Perspective"

Extract

The financial and economic crisis triggered in 2007–8 struck at the heart of the “Third Way” ideas, leaving a great void in the social-democratic vision and the social-democratic policies. Today, torn between austerity policies, a mild anti-austerity discourse, rhetorical Euro-Keynesianism and poor elaborations of ‘green growth’ (cf. Escalona et al. 2013, 23-24) this great historical current lacks a convincing alternative. Wider transformations in modern capitalism, often conceptualized under the catch-all rubric of ‘neoliberal globalization’, together with choices made by the social-democratic leadership themselves, have produced a system of influences and constraints within which social democracy, and the Left as a whole, find themselves trapped.

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Stefan Svallfors
Södertörn University

"Politics for Hire: Policy Professionals in the Age of Neoliberalism"

Extract

The services that policy professionals supply are not only local and global at the same time, they are also both personalized and professionalized. They are personalized because based in personal reputation, trust, loyalty, and reciprocity. The relations between Policy professionals and their principals are often close and tied to these specific persons rather than based in meritocracy and impersonal formalized relations. Their networks need constant tending and the exchange of mutual benefits (such as information). At the same time, their operations are of a highly professionalized kind, based both in science and on-the-job socialization, and possible to bring to the market.

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Section 2: The Social Worlds of Neoliberalism

Lucas Chancel
World Inequality Lab / Paris School of Economics

"Globalization, growth and inequality: Highlights from the World Inequality Report 2018"

Extract

Increasing income inequality and the large transfers of public to private wealth occurring over the past forty years have yielded rising wealth inequality among individuals. Wealth inequality has not, however, yet reached its early-twentieth-century levels in Europe or in the United States. In the United States, the top 1% wealth share rose from 22% in 1980 to 39% in 2014. Most of that increase in inequality was due to the rise of the top 0.1% wealth owners. The increase in top-wealth shares in France and the UK was more moderate over the past forty years, in part due to the dampening effect of the rising housing wealth of the middle class, and a lower level of income inequality than the United States’.

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Dorit Geva
Central European University

"On the Ordonationalist Political Party: The French National Front and Hungary’s Fidesz"

Extract

The French National Front and Hungary’s Fidesz party developed from distinct political histories, yet share enough features that we can now identify the emergence of an ordonationalist party family. The ordonationalist party is a composite of four features: 1. Political neoliberalization through the rise of technocratic economic expertise in the party; 2. An ordoliberal ideology emphasizing a strong state, and strong leadership, steering capitalist market competition; 3. Endorsement of neoliberal morality through punishment of the poor and harsh penal policies; and finally, 4. Racist ideologies which seek to foster internal solidarities within the “pure” nation regardless of class, and which even deny the politics of class, but which are exclusionary through racial and ethnic lines.

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Olivier Godechot
Sciences Po - Paris

"The Great Separation: Inequality, Segregation, and the Role of Finance"

Extract

The aim of these workplace segregation analyses is also to focus on the consequences of this decline in top-to-bottom interactions at work. The clustering of high-profile activities in some specific establishments located in a limited set of urban areas, or in special districts of those urban areas, also impacts the probability of interaction in neighborhoods. Indeed, we also find ‒ as shown previously for the US (Reardon and Bischoff, 2011) and France (Godechot, 2013) ‒ an increasing economic residential segregation. The residential isolation (captured at the municipality level) of the top 1% increased by a factor of 1.4 in France, 1.3 in Sweden, and 1.2 in Canada. In contrast to the literature on urban segregation, which implicitly blames the rich for deliberately avoiding the poor for schooling, status, and security purposes, we propose that the increasing residential isolation of the rich has a great deal to do with a powerful increase in workplace segregation. This helps us to bring macro socioeconomic factors into our understanding of the rich’s growing isolation.

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Adam Goldstein
Princeton University

"Individuation and Stratification"

Extract

Recent institutional transformations in capitalist societies have heightened the role of individual choices, individual risks, and individual data across numerous domains of socio-economic life. In this note, I focus on individuation as a main current of neoliberalism and discuss its implications for contemporary social stratification regimes. By individuation, I mean the restructuring of institutions to create more personalized, individual-specific mechanisms for allocating resources and risks. This includes the devolution of choice to individuals in public and private social provision, such as school choice programs, defined-contribution pension systems, and consumer-based health insurance. It also includes efforts to rationalize bureaucratic decisions by using personal data to make ever more granular distinctions between individuals. Such forms of institutionalized devolution help explain the pervasive growth of both within- and between-group inequalities. Individuation at the proximate level in fact heightens between-group disparities in outcomes because it renders more consequential all of the pre-existing resource disparities between social groups. Similarly, nominally person-specific evaluative criteria such as credit scores amplify inter-group differences while obscuring their underlying social structural bases.

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Stephanie L. Mudge
University of California, Davis

"Can Progressive Experts Make Progressives?"

Extract

There is a certain parallel in this understanding of working class voters [as “unreliable”] and the sense of the West Virginia miner who suspects that political elites “look down” on him: the progressive viewpoint essentializes, and thence dismisses, the working-class voter; the working-class voter experiences contemporary progressive politics as a politics of dismissal and condescension. Both perspectives are true in their way, but really truth is not the central issue. The more important possibility is that they are constituted in relation to each other—that one begets, or even necessitates, the other.

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Armin Schäfer
University of Münster

"The Poor Representation of the Poor"

Extract

In any democracy, voting rights are more equally distributed than income or wealth. In principle, the poor could team up with the middle class and use this leverage to “soak the rich” through higher taxes and more redistribution. The “median voter theorem” would suggest that this happens whenever the median voter has an income below the mean income in a society. Unfortunately for the theory, this is not what we observe. First, due to unequal participation, the median voter’s income considerably exceeds the median income of all citizens. Second, in more unequal societies the demand for redistribution is lower than in more egalitarian ones and income inequality has increased in most established democracies. In this note, I argue that the main reason for this development is that economic and political inequality reinforce each other.

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Dylan Riley
University of California, Berkeley

"Theses on Fascism and Trumpism"

Extract

Many pundits and scholars at least in the United States seem to want to draw a parallel between the inter-war right-wing dictatorships and President Donald Trump. Timothy Snyder’s claim that “our political order faces new threats not unlike the totalitarianisms of the twentieth century” is somewhat typical of this idea. The idea appears on both the center-left and the far-left, although these two political camps draw somewhat different conclusions from the supposed parallel. For the centrists the lesson is to avoid “extremism” and rally support for a broad coalition in support of restoration of the “rule of law” or “democracy.” For the far left the conclusion is to combat fascism in the streets through direct action. Obviously these analyses are simply lightly refurbished versions of the debates of the 1920s and 1930s on how to resist the interwar dictatorships effectively. My central claim in this paper is that both interpretations overlook a profound difference between the inter-war period and today. Fascism, as I will suggest, could arise only in conditions of a highly mobilized civil society, itself the product of mass-mobilizing warfare, the challenge of the Russian Revolution, and the interaction between an essentially traditional agrarian order and global competitive pressures in agriculture which produced a striking wave of peasant self-organization from the late nineteenth century right through to the 1930s. “Trumpism,” by contrast, arises in the context of a fragmented and depoliticized civil society: a product of the absence of mass-mobilizing warfare, of a revolutionary threat from the left, and of a traditional agrarian order. Paradoxically, Trumpism shares much more with nineteenth-century Bonapartism in which a charismatic figure emerges in the context of a fragmented and weak civil society, than it does with twentieth-century fascism.

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Section 3: Social Science at the Crossroads

Marion Fourcade
University of California, Berkeley

"The Will to Progress and the Twofold Truth of Capital"

Extract

The challenge for us social scientists today is to come to terms with the explicit or implicit models of society that are coming out of the brains of well-meaning techno-utopians. Their designs challenge us, first, to rethink our categories of analysis to keep up with the changes that are happening in front of our very eyes. Second, they challenge us to subject the political claims coming out of that universe to a vigorous critique. But we cannot carry out this critique effectively if we don’t take the folk ideology of capitalists seriously. We need to carefully peel all the layers of capital’s twofold truth and reveal its logic, in order to understand not only how the intertwining of doing well and doing good nourishes the soul of modern entrepreneurs, but also how it helps their designs march forward with minimal interference.

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Marie-Laure Salles-Djelic
CSO / Sciences Po - Paris

"Social Science at the Crossroads—Dead-end or Light at the End of the Dark Lane?"

Extract

The debate is an old one, masterfully explored in his time by Max Weber. What is the nature of human and social reality? And what are the epistemological consequences of that? Are humanity and sociality reducible to “nature” – and hence in some sense universal or at least revealing of universal laws that can be observed and deduced (the erklären of Max Weber)? Or is humanity and sociality in large part an historical and cultural process – hence only to be understood in context (Max Weber’s verstehen)? Is social science potentially a natural science like the others? Or is social science by the very nature of human and social reality an activity that explores meanings and meaning making in a great plurality and diversity of historical and cultural contexts?

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Wolfgang Streeck
MPfIG - Cologne

"What Crossroads?"

Extract

Critical theory continues to exist in marginalized academic niches while affirmative-positivistic social science thrives. Interestingly the two intermediate positions are almost entirely empty: • There is no social movement any more that would need or listen to organic intellectuals in the Gramscian sense: No demand for whatever they may supply. The revolution, whatever it is, no longer depends on correct social science as it seemed to in the Marxian world (well into the 1930s, and even the 1970s) • The dream of a (gradual) transformation by reform of the capitalist into a socialist society has ended with the end of social democracy

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Cornelia Woll
Sciences Po - Paris

"On the Role of the Social Sciences: What Crisis Are We Facing?"

Extract

Social sciences are necessary to establish guideposts in making sense of data, not just methodologically, but also by providing analytical scripts and measures that can be tested in discussed in a variety of contexts. What data can be used as valid proxies for a more diffuse social reality? What data points are necessary for a given societal phenomena? What comparative contrasts are relevant to analyze data properly? All of these questions require contextualized knowledge of empirical contexts that social sciences can provide, be they from a historical, comparative, qualitative or quantitative perspective.

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