There are signs of a major reorientation toward an economic policy framework that is rooted in production, work, and localism instead of finance, consumerism, and globalism. It might just turn into a new policy model that captures imaginations across the political spectrum.
A new economic paradigm becomes truly established when even its purported opponents start to see the world through its lens. At its height, the Keynesian welfare state received as much support from conservative politicians as it did from those on the left. In the United States, Republican presidents Dwight Eisenhower and Richard Nixon bought fully into the paradigm’s essential tenets – regulated markets, redistribution, social insurance, and counter-cyclical macroeconomic policies – and worked to expand social-welfare programs and strengthen workplace and environmental regulation.
It was similar with neoliberalism. The impetus for it came from economists and politicians – such as Milton Friedman, Ronald Reagan, and Margaret Thatcher – who were market enthusiasts. But the paradigm’s eventual dominance was due in no small part to center-left leaders like Bill Clinton and Tony Blair, who had internalized much of its pro-market agenda. These leaders pushed for deregulation, financialization, and hyper-globalization, while paying lip service to ameliorating the consequent rise in inequality and economic insecurity.
Today we are in the midst of a transition away from neoliberalism, but what will replace it is highly uncertain. The absence of a solidified new paradigm is not necessarily bad. We do not need yet another orthodoxy offering cookie-cutter solutions and ready-made blueprints for countries and regions with different circumstances and needs.