Why Didn’t the Economic Crisis Dislodge Economic Orthodoxy? Bridging Idealist and Materialist Accounts

• In Event: 411 - Regular Session. Comparative Sociology: The Paradoxes of Success and Failure in Comparative Sociology

Abstract

Why, despite the social and political upheaval it has wrought, has the current economic crisis not dislodged the current economic policy orthodoxy? This is in sharp contrast to previous economic crises dating back to the late 19th century, where economic crisis did lead to substantial shifts in economic policy orthodoxies. Existing explanations offer either idealist accounts focusing on the intellectual history behind the ascendancy of neoliberal ideology, or materialist accounts that emphasize shifts in the balance of class forces. What is lacking in both approaches is a convincing account of the mechanisms linking concrete macroeconomic changes in the advanced industrialized world, shifts in the relative power of labor and capital, and changes (or lack thereof) in dominant economic ideologies and policy prescriptions. This paper outlines a research agenda for an approach that reconciles idealist and materialist accounts by identifying these mechanisms. I propose an approach that is both comparative and historical, examining the relationship between economic crises and economic policy orthodoxies both across time and region. While I have no empirical findings to report, my preliminary hypotheses are that: 1) important sections of the organized working class were incorporated into the pro-austerity coalition, muting their capacity to articulate a political alternative; and 2) levels of international financial integration and increased political hegemony of the financial sector allowed a better coordinated, globalized financial elite to articulate and impose is policy preferences, even in the face of popular opposition.

Author

• Barry Eidlin, McGill University