Theme: Political Ideas | Content Type: Journal article

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On the Impossibility of Neoliberal Success: A Response to Michael Jacobs

Abby Innes

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Ashkan Forouzani

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In After Neoliberalism Michael Jacobs makes a compelling case for the systematic failures of neoliberal economic policies and in the neoclassical theories that justified them. He calls for an economics rooted in ontological institutionalism and for the (re)development of varied institutions charged with diverse social purposes. This response takes Jacobs’ critique further and states that neoliberalism fails because the neoclassical economics that underpins it is fundamentally utopian; and it is doomed to fail for the same ontological and epistemological reasons that condemned Soviet socialism. What these politically opposed doctrines hold in common is closed-system economic reasoning from axiomatic deduction presented as ‘a governing science’. It follows that both must tend to fail on contact with a three-dimensional reality in an always evolving, open-system world, subject to Knightian uncertainty. The dark historical joke is that a machine models of the economy, both Soviet and neoclassical neoliberal economics, converge on the same statecraft of quantification, output-planning, target-setting, forecasting and the presumption of only ‘rational’—socially productive—firms. The result in both systems is state and economic failure and the creation of production regimes that are a grotesque caricature of those promised, only now in the midst of an ecological emergency. It follows that we need an urgent revival of analytical pluralism in government and a non-utopian scientific realism about the true scope of the ecological crisis, so that Jacobs’ rich institutional ecosystem will have resilient foundations.

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    Abby Innes

    Abby Innes is Associate Professor of Political Economy at the European Institute, London School of Economics.

    Articles by Abby Innes
Volume 96, Issue 1

Latest Journal Issue

Volume 96, Issue 1

This issue features a collection titled 'The 2024 UK General Election' edited by Ben Jackson, Colm Murphy and Peter Sloman, in which authors including Ross Mckibbin; Will Jennings,  Gerry Stoker, Paula Surridge, Maria Sobolewska, Mathew Lawrence and many more discuss the sources of Labour’s victory and consider how the result will shape the future of British politics. Other articles include a commentary by Deborah Mabbett on Trump's proposal to buy Greenland; 'Centralised by Design: Anglocentric Constitutionalism, Accountability and the Failure of English Devolution' by John Denham and Janice Morphet; 'Broke and Broken: The Crises Facing Local Government in England' by David Jeffery; and 'Biographies of Discontent: The Challenges Facing Labour' by Helen Goodman. A selection of book reviews feature Morgan Jones' thoughts on 'Against Landlords: How to Solve the Housing Crisis' by Nick Bano, and Lyndsey Jenkins' review of 'Orwell's Ghosts: Wisdom and Warnings for the Twenty-First Century' by Laura Beers.

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