THERE WERE ALTERNATIVES: LESSONS FROM EFFORTS TO ADVANCE BEYOND KEYNESIAN AND NEOLIBERAL ECONOMIC POLICIES IN THE 1970s

Abstract

The article begins with a critique of analyses of neoliberalism that present the rise and hegemony of this form of capitalism as an inevitable adjustment of state apparatuses and policies to economic and social changes that had undermined previously existing Keynesian welfare states. Contrary to such view, the article argues that the New Left, labor militancy, and new social movements have thrown the Keynesian welfare state into a legitimation crisis in the early 1970s that was exacerbated by the world economic crisis 1974/1975. The second half of the decade saw a contest between progressive alternatives to the Keynesian welfare state and neoliberalism. The former failed because of the inability of progressive movements to build a historical bloc that would have been able to pursue alternative economic policies, and ultimately the transition to socialism, against opposition from capital owners and their middle‐class allies. Empirical evidence from Britain, France, Germany, and Sweden is presented to develop this historical argument. The last part of the article makes some comparisons between the legitimation and the economic crises of the 1970s and today. It concludes that progressive alternative relies on the convergence of the interests of certain social strata into a historical bloc for progressive change.