Cross-posted from JohnFeffer.com.
Neo-liberalism, like the famous cat, seems to have nine lives in Poland. The effort to cut back the state and give freer rein to the market has suffered at least three near-death experiences. The initial “shock therapy” approach implemented by Leszek Balcerowicz in the first Solidarity-affiliated government in 1990 generated such high unemployment and social dissatisfaction that voters ejected these first neo-liberal politicians from office and replaced them with the former Communists. But it turned out that the former Communists were more than happy to implement the same kind of austerity market reforms as their predecessors – with similar results. And they too eventually were booted from office.
The global financial crisis that swept the world after 2007 should have been the final nail in the coffin for the neo-liberal model, for hadn’t the unregulated market nearly sent the global economy into an irreversible tailspin? And yet, globally, neo-liberalism didn’t die. This was because of what Colin Crouch, in his book The Strange Non-Death of Neo-Liberalism, calls “privatized Keynesianism.” A combination of government deregulation and new market instruments provided easier credit for the poor and middle class and lucrative “derivatives” for the wealthy. Although these mechanisms took a hit during the crisis, they have more or less remained intact, substituting for what in a previous era would have been government support programs.