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 95, Issue 1

Latest Journal Issue

Volume 95, Issue 1

Includes a collection on the Future of Public Service Broadcasting, edited by Suzanne Franks and Jean Seaton. This features articles such as 'The Governance of the BBC' by Diane Coyle; 'A Public Service Internet - Reclaiming the Public Service Mission' by Helen Jay; and 'BBC Funding: Much Ado about the Cost of a Coffee a Week' by Patrick Barwise. There are a wide range of other articles including 'Back to the Stone Age: Europe's Mainstream Right and Climate Change’ by Mitya Pearson and 'Labour, the Unions and Proportional Representation' by Cameron Rhys Herbert. Finally, there is a selection of book reviews such as Lyndsey Jenkins's review of Fighting For Life: The Twelve Battles that Made Our NHS and the Struggle for Its Future by Isabel Hardman, and Victoria Brittain's review of Three Worlds, Memoirs of an Arab-Jew by Avi Shlaim.

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