Rise and Fall of Neoliberal Capitalism

The financial and economic collapse that began in the United States in 2008 and spread to the rest of the world continues to burden the global economy. David Kotz, who was one of the few academic economists to predict it, argues that the ongoing economic crisis is not simply the aftermath of financial panic and an unusually severe recession but instead is a structural crisis of neoliberal, or free-market, capitalism. Consequently, continuing stagnation cannot be resolved by policy measures alone. It requires major institutional restructuring.“Kotz’s book will reward careful study by everyone interested in the question ofstages in the history of capitalism.”—Edwin Dickens, Science & Society“Whereas [others] suggest that the downfall of the postwar system in Europe and the United States is the result of the triumph of ideas, Kotz argues persuasively that it is actually the result of the exercise of power by those who benefit from the capitalist economic organization of society. The analysis and evidence he brings to bear in support of the role of power exercised by business and political leaders is a most valuable aspect of this book—one among many important contributions to our knowledge that makes it worthwhile.”—Michael Meeropol, Challenge

Whereas [others] suggest that the downfall of the postwar system in Europe and the United States is the result of the triumph of ideas, Kotz argues persuasively that it is actually the result of the exercise of power by those who benefit from the capitalist economic organization of society. The analysis and evidence he brings to bear in support of the role of power exercised by business and political leaders is a most valuable aspect of this book—one among many important contributions to our knowledge that makes it worthwhile…In analyzing how neoliberalism worked, Kotz makes an important contribution to our understanding of the roots of the economic crisis of 2008 and the failure of the economy to rebound., Kotz has written a highly readable book that is easily accessible to the general public. The book would serve as an excellent companion for courses in macroeconomics and economic history., Kotz’s book will reward careful study by everyone interested in the question of stages in the history of capitalism., Kotz contrasts neoliberal capitalism (1979–2007) with its predecessor, regulated capitalism (1948–73), in order to explain the development of the financial crisis and subsequent recession that began in the U.S. in 2007, which he views as the greatest challenge for neoliberal capitalism to date. His neo-Marxian analysis is set within a historical treatment of U.S. political economy and offers a wealth of institutional comparisons and economic data in its discussion of the unique characteristics of the recent period… The goal of the book is to explain how neoliberal institutions gave rise to the financial crisis; while Kotz does not attempt to predict Western capitalism’s next institutional form, he offers a number of reasonable and insightful considerations about its possible future directions., David Kotz gives an insightful and original account of the origins of the economic crisis. He attributes it to a massive upward redistribution of income. This in turn led to a surge in debt, financial crisis, and huge excess capacity. His outline of possible paths of recovery should give readers much to consider.

David M. Kotz is Professor of Economics at the University of Massachusetts, Amherst, and Distinguished Professor, School of Economics, Shanghai University of Finance and Economics.