Costs and benefits of neoliberalism.: A class analysis

Neoliberalism is the ideological expression of the return to hegemony of the financial fraction of ruling classes. The meaning of this movement can only be understood from a historical perspective. Modern finance, linked to he real economy, appeared in the wake of the structural crisis of the late nineteenth century. It lost its unrivalled domination, when the Keynesian compromise was ushered in by the succession of the great depression and World War II. Its return to power followed the crisis which began in the 1970s. The class character of neoliberalism is evident from an examination of the available figures. It prolonged the deficient profit rates of non-financial corporations and, thus, slow growth and unemployment. It was responsible for the deficits and the growing indebtedness of the states, as well as for the crisis of the debt of Third World countries, etc. But not enough attention has been paid to the benefits that finance gleaned from its return to hegemony during the crisis: the stunning rise of the profits and growth of the financial sector, only delayed in the US by the banking and thrift crises of the 1980s. It is not that finance organized to minimize its own costs during the crisis. It actually benefited from the crisis in amazing proportions, already during the crisis as in France, or after as in the US financial sector. One should not underestimate the sufferings of the unemployed and homeless, or of Third-world countries. But perhaps the biggest cost stemming from the rise of finance is the increase in the domestic and international instability.