Neoliberalism is symptom, not cause: Geriatric capitalism in the UK, USA and Germany

Matt Vidal


For many critics of capitalism, including the entire liberal left, the main cause of the current malaise is the reign of neoliberalism. This suggests that capitalism can be saved with a return to Keynesianism and social democracy. In contrast, I argue that neoliberalism is only a symptom of Atlantic capitalism evolving from it’s mature stage (fordism) to its geriatric stage (postfordism). The concept of fordism is central to an adequate understanding of the developmental trajectory of 20th century capitalism in Europe and North America. The American economy became the most powerful economy in the world over the 20th century not simply because of its fordist model of production; the latter was only effective within a national accumulation regime including a keynesian welfare state and an explicit class compromise between big business and big unions, and an international accumulation regime in which the US was the hegemonic state within the Bretton Woods monetary system. I trace the development of the Atlantic capitalism from the regional economies in Europe around the time of the industrial revolution to the development and institutionalization of the international, fordist accumulation regime of Atlantic capitalism from WWII to the 1970s. The latter provided a unique institutional context allowing an extraordinary combination of high profits, rising real wages and strong GDP growth.

The neoliberal political movement achieved power on the back of the crisis of Fordism. Under the new round of internationalization following this crisis, the postfordist regime is shown to be inherently dysfunctional, characterised by manifest tendencies toward stagnation and associated regressive trends in work and employment relations. Eliminating neoliberalism would not eliminate these structural problems.

The analysis focuses on the UK, US and Germany, showing that in the postfordist period all three countries have experienced declining profit rates, wage shares and growth rates. I argue that these outcomes are signs that capitalism in the Atlantic regime has entered a stage of permanent dysfunctionality and inability to provide rising living standards for the majority of the population.

Political economy - acumulation - The State - class inequality - finacialization - profit rate - neoliberalism