Neoliberalism in the balance

Important qualifications notwithstanding, the neoliberal transformation in the 1980s and 1990s has indeed made European capitalism more market- driven and market-accommodating (Glyn, 2006). The strongest liberalization has taken place in capital and product markets. The neoliberal policy shift to hard currency and balanced budgets also managed to contain wage-price inflation. In more normative terms, the stronger emphasis on fostering work conditionality in social insurance provision, bent on mitigating 'moral hazard' and 'adverse selection' dilemmas, clearly reveals a rebalancing of individual rights and obligations away from the Rawlsian 'difference principle' of social justice. Throughout the 1980s and 1990s, the ideas of the political philosopher Ronald Dworkin (1981a, b, c) about individual responsibility and effort and the importance of reciprocity more generally, gained wider acceptance behind the majority of labour market reforms, enacted during the neoliberal era, by linking the right to income support with the responsibility actively to seek employment or to take up vocational training and education (Vandenbroucke, 2001). Neoliberalism's willingness to tolerate greater income inequality in the name of free markets has had an even more dramatic impact. The 1980s and 1990s were indeed decades of greater inequality and more income poverty, including across the more egalitarian and stronger welfare states in Scandinavia and continental Europe (Kenworthy, 2008; OECD, 2008). On account of welfare state retrenchment, labour market deregulation, and the disengagement from deadlocked corporatism, the achievement of neoliberalisms are more elusive. By the 2000s, OECD governments seemingly 'spent more on social protection than at any time in history' (OECD, 2008). In this respect, the neoliberal attack on the welfare state remained incomplete.

 
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