Democracy and Neoliberalism. On the Crisis of Democratic Legitimacy caused by Neoliberal Transformation

Abstract

Time has run out for democratic sovereignty in the now bygone era of neoliberal governmentality and the time “bought” in the thirty year period after the Second World War with social Welfare State policies is the price we now have to pay in terms of public debt and distributional conflict in an irreversible crisis of representative democracy. This is the assumption underlying Wolfgang Streeck’s essay, Buying Time. The Postponed Crisis of Democratic Capitalism. By reconstructing the monumental steps that led to the financial crisis of 2008 and its current political development governed by the central banks and the European Union, Streeck focuses on neoliberal transformation and shows its expansion in light of the conflict between capital and work that developed at the end of the 1970s following a decline in growth and a rise in inflation. With the start of market deregulation and initial dismantling of the social guarantees provided by welfare, there is a change in the mechanism of governance applied during Fordism. Governance is no longer decided by the sovereign will of states for the wellbeing of the population but by market competition for trade liberalisation. By using an innovative approach to historical narrative, Streeck analyses the delaying strategy implemented by state policies, first with inflation and then with public and private debt, in response to the growing regulatory power of the markets and rating agencies, and sees the crises of the last thirty years as the result of a reorganisation of power technologies in which current neoliberal rationality takes shape.

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