NEOLIBERALISM HAS LOST much of its political legitimacy and nearly all
its popular appeal during the last decade. Apologias of privatization,
fiscal restraint, high interest rates, capital account liberalization, trade unionbashing and other policies overtly associated with the neoliberal reforms are in retreat. After sailing triumphantly to world domination in the eighties and nineties, neoliberalism has become a political liability. Its strident rhetoric has grown tired, and no longer brings votes – quite the contrary; neoliberal platforms must now be disguised. The political shrivelling of neoliberalism has been especially evident since the East Asian crises and the collapse of the dot.com bubble. The corruption scandals that came to light under Bush II have helped to unmask the regressive nature of the neoliberal project and its organic links with the reconstitution of US imperialism. The political retreat of neoliberalism is startlingly evident in any reputable bookshop: the number of titles purporting to defend the neoliberal reforms has declined precipitously both in quality and in market appeal, while a large number of critical works have become available to growing numbers of readers.

In spite of these political defeats, neoliberalism continues to be not only
the dominant economic policy, but also the dominant modality of social and
economic reproduction in most countries. It could easily be argued that the
economic grip of neoliberalism is becoming stronger even as its political
legitimacy wanes. This disconnect is examined below, through a specific
angle: the sources, significance and political implications of the Keynesian
and Marxist critiques of neoliberalism.

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