Robert Manne (1947)
Just as stagflation fatally undermined the Keynesian social-democratic consensus, so too will the combination of the Great Recession and the growing recognition of the destructive role played by neo-liberalism in inhibiting an effective response to catastrophic climate change eventually discredit the idea at the heart of neo-liberalism: the faith in the magic of the free market. …
[However, there] are two important differences between the circumstances surrounding the end of the Keynesian era in the late 1970s and the present unravelling of neo-liberalism.
When the Keynesian consensus collapsed, a party-in-waiting existed, ready to seize its chance.
No equivalent anti-neo-liberal party exists today.
Old-style socialism is dead.
Left-of-centre neo-Keynesians are far less ideological, far more divided and far more cautious than their neo-liberal adversaries.
Even more importantly, at the moment of the neo-liberal collapse, humanity confronts the diabolical problem of climate change.
Those who inherit the post-neo-liberal world will be obliged not merely to strive to reconcile the hope for renewed prosperity with the quest for domestic and global social justice.
They will also be obliged to reconcile both these ambitions with the gravest challenge humankind has ever faced.
No one yet knows what the new era will look like or what it will eventually be called.
Only one thing seems, at present, reasonably certain.
At the end of the era of free-market faith, we will be in a far better position to turn our attention to the kinds of ethical and environmental questions which, for thirty years, neo-liberalism encouraged us to [ignore.]
(Goodbye to All That? On the Failure of Neo-Liberalism and the Urgency of Change, 2010, p 36)
The Washington Consensus
Joseph Stiglitz (1943):
[It] is not surprising that policies based on models that depart as far from reality as those underlying the Washington Consensus so often led to failure.
(Nobel Prize Lecture, 8 December 2001)
Niall Ferguson (1964)
… John Williamson's original 1989 formulation [of the Washington Consensus advised policy-makers to:]
- Impose fiscal discipline;
- Reform taxation;
- Liberalize interest rates;
- Raise spending on health and education;
- Secure property rights;
- Privatize state-run industries;
- Deregulate markets;
- Adopt a competitive exchange rate;
- Remove barriers to trade;
- Remove barriers to foreign direct investment.
One recent study of [economic output] and consumption since 1870 has identified
- 148 crises in which a country experienced a cumulative decline in GDP of at least 10% and
- 87 crises in which consumption suffered a fall of comparable magnitude,
(p 342)
(The Ascent of Money, Penguin, 2008)



