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Hello, and welcome to Humanities Matter, brought to you by Brill. I'm Lee Chung-Grechault, and this week we'll be looking at key issues in the field of humanities. I'm speaking today with Professor Corey Bladd. He's author of Searching for Saviors, Economic Adversities, and the Challenge of Political Legitimacy in the Neo-liberal Era.
Professor Bladd, thanks so much for speaking with us today. Thank you very much for having me. So first of all, can you explain how state-led a neo-liberalization contributes to economic diversity? Sure, just the kind of idea of neo-liberalization, if we step back just a little bit, it's become a little bit more problematic in the contemporary era, but the idea behind a liberal capitalism or liberal economic affairs is really rooted in market orientation and allowing the market to dictate actions, whether they are political actions, whether they're social actions.
Essentially, the idea behind what we have come to term neo-liberalism is the ideology that the market should be essentially autonomous, able to kind of determine various paths with an emphasis on economic growth. So in that vein, the idea behind neo-liberalism as it's centered on economic growth should be broadly acceptable, should be broadly kind of championed, and in many cases it is. The problem is, however, that the role of regulation, particularly in the form of the state, plays a really important role in allowing capitalism to do what capitalism wants to do, which is maximized profit. And in that kind of light, the regulatory context of the state allows for the kind of mitigation of, not to kind of put too far to a point on it, but for example wage decreases, wage control.
So the kind of more equitable distribution of the benefits of that overall profit going to more people in a liberal capitalist context or in a neo-liberal context, those regulatory kind of protections or from a neo-liberal perspective barriers are minimized or removed. And in that, the idea is that you're going to enhance overall profit and therefore expansion and growth. The theory is that that expansion will then create more jobs, will create more opportunities, and the so-called trickle-down effect takes place where you have more economic opportunities for more people and not necessarily just for the owners, CEOs, affluent, et cetera. The problem in practice though is that the tendencies associated with growth maximization really put a lot of pressure on companies, for example, and just, you know, this could be extended to all sorts of different examples.
It puts a lot of pressure, especially as these companies go public. So shareholder pressure overall growth in incentivization to basically maximize profits by any means necessary. And what that ultimately does is puts downward pressure on wages in particular and really just kind of an attempt to kind of decrease overall costs in general. But it's this impact on wages because essentially in most industries, the large number of overhead costs or the largest amount of overhead costs go towards wages and goes towards labor.
So in that light, the pressure on companies to keep wages manageable for use of diplomatic term or to decrease them by, you know, really as many means as you can, places that kind of disproportionate emphasis on profit growth with a kind of increasing cost on decreasing things like benefits, overall expenditures in terms of average wage, hourly wage, salary wage, however somebody is giving their money and bringing it back to their household. So, you know, that's one part of the equation. The other part of the equation is that in neoliberal context, the emphasis on reducing regulatory capacities of the state means that this emphasis is broad-term emphasis on almost ubiquitous, not in practice, but in theory, tax reduction and state revenue decreases ultimately puts a lot of pressure on public services. So to make a long story short, the kind of combined effect of neoliberalism on households, on average households, regardless of country, regardless of location, is to basically either stagnate or decrease earning potential.
At the same time, increasing costs for everything from healthcare, retirement, education, transportation, whatever the case may be, things that have traditionally coming out of the kind of tranquility, is embedded liberal period from what, 1944 through 1970s or so. You know, these public services are increasingly diminished and the kind of ideology of privatization places increased cost responsibilities, not on governments through tax revenues, but on individuals and households through actually paying for those respective services through the context of privatization. So again, long story short, there's a lot of downward pressure in order to kind of fuel and maintain economic growth and really profit maximization that isn't shared. It's not distributed equitably.
What ends up happening is that for large portions of the population, as these economic trends kind of continue and the irony is, as we see economic growth kind of increase and increase and increase in increase, the ability for households to actually afford the increased cost of living, increased household expenditures, increased daily expenditures becomes more and more challenging. Yeah, you talked about this enormous amount of growth that we experienced in the post-war period and then that kind of dips off in the 1970s. What happened there exactly? What sort of economic theories were at play in that post-war period that the state still function as a kind of regulator and even as a protector in some cases?
Yeah, I mean, this is really coming out of a much more liberal or deregulated period in the kind of pre-war era. And essentially we're talking about an Atlantic capitalism here in North America for all intents and purposes, so the age of colonialism in this context. So essentially after the second world really at the very end of the Second World War, the so-called Bretton Woods system emerged as a way to kind of restart this kind of transatlantic capitalist context through kind of two mechanisms. The first was an emphasis on national economic growth that was really ironically facilitated through kind of a dollar hegemonic international system, supposedly governed by the International Monetary Fund and essentially what would be on the World Bank.
But for all intents and purposes, this kind of national emphasis on growth was rooted in water-scale trade surclasses in the attempt to try and encourage increased manufacturing for export purposes. And in the kind of post-war period that works fairly well, it facilitated American consumption. The kind of expansion in the US was the one country that was encouraged to run a trade, a trade deficit. So, you know, we bought a lot of stuff, we sent a lot of money out, you know, that system kind of worked okay.
And at the same time, you had the emergence of a general agreement on trade and tariffs or gap, which was an attempt to kind of gradually work toward what we would ultimately refer to as globalization emerging in the 1980s and really kind of taking off in the 1990s. But this, the role of the state in this kind of Bretton Woods period, this embedded liberal period was central, was absolutely central. Ultimately, what ended up happening was a dramatic encouragement ideologically and on the back of Keynesian economic theory to really try and enhance the consumptive capacity of domestic populations. So, if you could encourage people to spend money, that was going to be the driver of your economy.
And in order to increase people's consumptive capacity, you had to do things like allow wage increases and pay, you know, providing increase in public services that took that household spending burden off of individuals and placed that burden, you know, ultimately through tax revenues, but placed that burden on the state. So, the state in many national economies becomes responsible for increased healthcare provision, increased educational provision, increased pension provision, infrastructure, etc, etc. So, as the state becomes more responsible for providing these services and taking that individual burden away from households, households then are able to develop in the best case scenarios, the opportunity for large scale consumption. So, the idea of individual homeownership becomes enhanced and expanded.
The idea of large scale consumption in the form of automobiles in the form of, you know, just masking tumor items, all of these different things really kind of take off to a certain extent in this period where that starts to break down in the 1970s is largely rooted in really several things. But the kind of predominant shock was through two successive bulk oil and margos that increased energy costs globally. That, in addition to the kind of problematic management, shall we put it, of the dollar-hed mnemonic system and kind of the emergence of various centers of dollar trading, you had kind of ultimately the ingredients for a large scale collapse, which is why Nixon ended the overall rent-wood system in 1971. And we had a new developing kind of global currency system, emerging 1973.
But by that point in time, the increase in the cost of everything was dramatically rising. And at the same time, a lot of companies globally, well, again, most of this is taking place in Europe and North America to be globally frank, the kind of dramatic impact of these overall price increases impacted overall stagnation to the point where the 70s turns into almost the last decade for a lot of people in this idea of promoting consumption loses a lot of favor. So that, you know, the combination of all of those factors ultimately results in the opening for an ideological shift away from this really kind of demand side centered ideology of Keynesian economics towards a much more supply side orientation found in neoliberal economics. So again, long winded and probably overexplanatory way, that's pretty much that shift into the 1980s really was dramatically kind of championed by those who would kind of minimize the role of the state and the Ronald Reagan referred to government as evil.
You know, this kind of, I'm sorry, what's this in its, but the overall emphasis on on state decreasing capacities for regulation and allowing the market to take care of all of these things begins with that kind of decline in demise in the 1970s. So we have that decline and then fast forward to today we're seeing this rise of nationalism throughout the globe, even in places like Sweden and Finland, which are to the countries that you chose to study for this paper. And you mentioned that the rise of nationalism is not the cause of immigration that almost seems more like a byproduct of this frustration that people have with their economic adversity. And so I'm wondering, how come these nationalist strategies don't change market oriented reforms?
Can you give an example of like any of those nationalist strategies that have been proposed and yet they don't really do anything to change this problem of economic adversity or change this sort of widening chasm that we're seeing right now between the rich and the poor? Sure. I think a lot of that comes in with, you know, one of the theoretical kind of pieces that I use, you know, Pierre Bourdieu's concept of Doksa. And this idea that there's a kind of a singular way to look at something, you know, they're in the British kind of parlance, the emergence of this idea of there is no alternative.
There is no alternative to market to market determinism. This reality poses really significant challenges for nationalist parties. So when they want to, for example, and this is, you know, regardless of country orientation, when nationalist parties want to enhance the economic viability of individual countries, they're really limited in what they can do simply because of that dominance of, you know, kind of neoliberal capitalism, the kind of idea that you really can't do much in terms of expanding kind of state regulatory capacities. You know, this is being seen dramatically in the United States right now where you have a, you know, greater and the Suntare of controls, but really kind of seeing the kind of limits of what can be done within a deeply integrated and deeply interdependent global economy in terms of production in terms of supply chains.
There's, there are a number of different roadblocks that these parties run into. And so if you couple the kind of structural context, if you will, with a really challenging ideological milieu, most nationalist parties tend to be kind of more right oriented. And mostly this is not universal and actually Finland provides a really interesting counterpoint to that is the true Fin Party that, you know, represents, I guess, the formalization of Finnish nationalist politics is, you know, a validly quote unquote left oriented on their, they're very supportive of the Finnish welfare state, although they are becoming increasingly anti-tax, which is interesting a lot of different ways. But the underlying reality of what ideologies exist economically don't stray very far from those fundamental neoliberal tenants of minimal regulation, tax reductions, reduced state revenues and reduced state capacities to regulate and to provide respective services.
That has not shown over the past 30 to 40 years, any capacity to actually float all ships as the, as the saying goes. So these kind of sustained economic adversities that really give rise to nationalist parties aren't really able to be dealt with economically, which is the, the front really the central problem. So many, in many cases, these nationalist parties are able to gain tremendous initial support, you know, by, by kind of highlighting the economic precarity of large scale portions of their respective populations. But they have trouble kind of maintaining this, this kind of momentum, this electoral momentum primarily because when they're in positions of power, they're not able to actually do much in terms of adjusting or mitigating these, these adverse economic conditions.
You know, other examples of where this might not necessarily be a left right kind of economy show up really significantly in Scandinavia, where you have the kind of the protection of the welfare state as being a mechanism of nationalism. There shows up a lot in Denmark where the Danish people's party where this kind of emerging welfare chauvinism, you know, we need to protect the Danish welfare states from, you know, people who may or may not be contributing to the state revenues that are needed to generate that over all system. But in an environment of increasing liberalization, which is true of Sweden in particular, but also to a significant degree in Finland and this may be starting to kind of shift back a little bit. But the 2000s in particular, really the 2010s at the Economist voted Sweden the most, you know, the most rapidly neo-liberalizing country in the world.
So the kind of underlying shifts and changes of this kind of economic integration and the diminishing or the authorization of some of these public services. So maybe we're not going to provide your entire pension anymore. Maybe we're going to require that you pay for 50% of it. Or, you know, as these kind of shifts and changes happen, the burden becomes more placed as it has in other kind of advanced capitalist countries.
The cost burden for these services gives place more and more on individual households. And as you have a deregulating context in all of these instances, you have increasing costs for all sorts of different things. And I emphasized in the paper increases in rents and increases in overall home costs. So mortgages, the ability to actually have home.
So as these costs increase, the ability for governments, regardless of whether you are a nationalist party or otherwise, become really constrained because of this almost universal acceptance with a few exceptions of a need to increase market integration and increase market determinism, i.e. neo-liberalism. This was found really predominantly in Finland with a social democratic party which lost a tremendous amount of support in many of whom, as was the case in Sweden, as was the case in the UK, with the kind of emergence of the UK IP. And in many, many other places that kind of traditional labor shift those manufacturing jobs that used to be so important to the overall economy in the 50s, 60s and 70s.
Those populations felt abandoned by labor parties and left-leaning parties that embraced these market reforms, the comptosal third way of the 1990s, the Clinton administration, the US, until we glare and all that stuff in the UK. That was a broadly integrated kind of strategy and the idea that you could have economic growth while at the same time, kind of sort of trying to also protect your traditional constituencies and ended up becoming ultimately a failed strategy. And a lot of people in all of these respective countries became deeply frustrated with that. They felt abandoned by social democratic parties, by labor parties and really shifted their allegiance to someone, anyone who might provide some sort of different strategy.
And you see this trend happening not just in nationalist parties, but just in the rise of tertiary parties, really around the world. You know, parties that had very little to do with formal politics before, five-star in Italy, the emergence of the pirate party, for example, in Iceland, in Germany, and in other words, you see these kind of people searching for alternatives to the traditional kind of dominant parties. And they're really just looking for someone who will make life better in a material context for large-scale portions of the population that hasn't been happening within the context of the old capitalism. That brings us to an end of part one of our conversation with Professor Quarryblad.
Be sure to stay tuned for part two on the Humanities Matter Podcast by Braille. You are listening to the Humanities Matter Podcast. You can find more podcast episodes on Apple Podcast, Spotify, and Google Podcast.