The Political Economy of Global Financial Liberalization in Historical Perspective

<Online Only>This chapter examines authoritarian liberalism as a more general phenomenon ‘beyond Weimar’. It looks outside Weimar Germany and takes a longer historical perspective, revealing deeper tensions in liberalism itself, specifically its inability to respond to the issue of socio-economic inequality in a mass democracy. The major Weimar constitutional theorists—Hans Kelsen, Carl Schmitt, and Hermann Heller—had no answer to the social question as a matter of constitutional self-defence. The chapter then discusses the political economy of the various crises across Europe—in Italy, France, and Austria—revealing a similar quandary. As Karl Polanyi argued, in these contexts, the turn to authoritarian liberalism fatally weakened political democracy and left it disarmed when faced with the fascist countermovement. Later in the interwar period, proposals for neo-liberalism would be introduced, symbolized by the organization of the Walter Lippman Colloquium in 1938.</Online Only>

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The Political Economy of the Profitability Crisis in Britain

10.1093/oso/9780192897015.003.0003 ◽

2021 ◽

pp. 45-68

Author(s):

Jack Copley

Keyword(s):

Political Economy ◽

Currency Crises ◽

Financial Liberalization ◽

The Political ◽

Historical Overview ◽

Global Competitiveness ◽

High Inflation ◽

Current Account Imbalances ◽

Economic Boom ◽

Acute Crisis

This chapter provides a historical overview of the profitability crisis that undermined the postwar economic boom, gave rise to the phenomenon of stagflation, and ultimately drove the financial liberalizations explored in this book. This chapter puts forward a novel historical categorization of British stagflation, by identifying two distinct phases within Britain’s experience of the global profitability crisis. The first, from 1967 to 1977, was characterized by low rates of profit, rising inflation, and repeated current account imbalances that resulted in currency crises. The second, from 1977 to 1983, still saw low profitability and high inflation, but the rising price of sterling ensured that there were no sterling crises. The chapter then details how governments combined governing strategies of depoliticized discipline and palliation in different ways during these two periods of acute crisis in order to navigate the contradictory imperatives of global competitiveness and domestic legitimacy. Policies of financial liberalization constituted attempts to support these strategies.

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