What Makes Neoliberalism Crisis-Prone? Streeck's Historiography of Neoliberal Reform

Streeck develops his crisis theory in order to reveal how order in the Northern world – essentially, the early-industrialising Organisation for Economic Co-operation and Development (OECD) member states – is falling apart, with allegedly epochal consequences. We are told that a long-running crisis, triggered by a neoliberal breakthrough towards institutionalising a highly marketised polity that began around half a century ago, appears set to finally obliterate capitalism itself. On what does Streeck base such assertions? As a first step, it is useful to attempt a very brief reconstruction of the general narrative arc of Streeck's crisis theory as a whole. Streeck does not settle for simply recapitulating clearly significant, but now entirely familiar, accounts of the Thatcher and Reagan ‘revolutions’ beginning in 1979. These transformations themselves had important antecedents. In building up his crisis theory, Streeck relies heavily on a historiographic story about the marketisation of the Northern polities in which the post-Second World War ‘tax state’, as the institutional underpinning of what Streeck (2014a: ix, 111) gestures at with terms like ‘post-war democratic capitalism’, ‘embedded liberalism’ or ‘Keynesian, state-administered capitalism’, transformed over the 1970s into the tax-shy neoliberal ‘debt state’ emerging around the early 1980s.³ What happened in the 1980s was largely a response to the spectacular inflation of the 1970s (sometimes discussed as ‘stagflation’ in relation to the coupled problem of low growth). Deflationary monetarist policies led to the widespread unemployment that complemented an unprecedented policy assault on labour organisations, which neoliberals identified as the source of systemic strain due to rising post-war welfare and wage demands running ahead of growth and compelling businesses to increase their prices.

For Streeck, what looked from a neoliberal perspective to be the solution to one problem was simply a replacement of the inflationary crisis with a debt crisis. Remedial fiscal consolidation to address soaring debt became widespread in the 1990s, when we see the further emergence of a somewhat distinct neoliberal configuration that Streeck calls the ‘consolidation state’. By this Streeck means a regime of fiscal austerity that was wheeled out to service the debt side of public budgets to avoid a capitulation to demands for increased progressive taxation. Consolidation has, however, not always succeeded, and in many Northern societies, debilitating public debt lingered and received a boost from the post-2008 fallout. From its inception, attempted consolidation has been marked by such things as greatly increased cuts on social spending and privatisation targeting the lingering institutional pivots of the large post-war welfare state, with private credit supported by capital market liberalisation being leveraged to keep the bottom in.⁴

From Historiography to Genealogy: Streeck on ‘Kaleckian Reactions’

Streeck occasionally also weighs in on the epistemic context of the policy reforms described earlier.⁵ He is, however, overwhelmingly referring to these institutional changes themselves when speaking of ‘neoliberalism’. At bottom, Streeck seeks, in a loosely Polanyian sense, to describe an institutional disembedding of market mechanisms, along with the political fallout it caused. This ambitious historiography of the neoliberal reform process, or neoliberalisation, is impressive for its ability to conceptually assimilate a multitude of events into a reasonably cohesive narrative of large-scale social change spanning half a century. All the same, there is much that can be questioned about how this has been pulled off. Such questioning can, moreover, go considerably beyond pointing to what, at least for now, remains the conspicuous non-death of capitalism after the 2008 crisis, and a decade after time was called on capitalism in Streeck's Buying Time.

One possible direction here, which most of Streeck's critics have already taken, is by considering Streeck's reading of the European Union (EU), which he views as the most extreme realisation of actually existing neoliberalisation. Streeck's exchange with Jürgen Habermas on this issue is particularly revealing. For Habermas (2015 [2013]: 85–102), Streeck is too sanguine about the dangers of nationalism when arguing for the need to re-embed markets into national frameworks of regulatory oversight while extricating them entirely from the EU. At the same time, Habermas considers Streeck's solution to what they both understand as the problem of excessive technocratic control of the EU to be too extreme in opting for total dissolution rather than reform. Streeck (2014b: 213–221; 2017: 246–252), for his part, has argued that Habermas's concern with technocracy, laudable as far as it goes, remains uncoupled from any serious consideration of the broader systemic problem of capitalism, while casting doubt on the realism of Habermas's reformist belief in the institutional malleability of the EU.

Putting aside the question of the extent to which Streeck's criticisms of Habermas do fully land, they help to make the deeper grounds for his own EU-pessimism clearer. This has two basic dimensions. At a more narrowly institutional level, Streeck is not persuaded that there is any weighty evidence of a wide-ranging and sincere desire for more than cosmetic reform of the EU, and particularly of the centralisation of eurozone monetary policy in the European Central Bank. But Streeck's institutional scepticism here relies on a second, more systemic, set of concerns. While Habermas appears to view EU technocracy as a sort of historical accident of bureaucratic hypertrophy arising in the otherwise beneficent process of protecting EU citizens against such collective dangers as destabilising currency speculation, Streeck considers this perplexingly naïve. For Streeck (2017: 251), a critically serious approach to the democratic deficit in the EU cannot afford to look away from the clear element of ‘pro-capitalist neo-liberal intention’ behind EU processes of institutional worldmaking, with the common market and eurozone currency union combining to create a singularly extreme instantiation of the far larger historical process of neoliberalisation I have outlined thus far.

Considering this deeper background to Streeck's anti-EU position, one can also see why Streeck (2014b: 216) bristles at Habermas's (2015: 88, 91) rather dismissive characterisation of his abolitionist position and its retreat behind the ‘Maginot Line of national sovereignty’ as merely the ‘nostalgic option’. Whatever Streeck's motivations, his proffered arguments clearly are grounded in serious reflection both on what he believes is a trade-off between advanced supra-national economic integration and national sovereignty and on the deeper historical processes that have allowed this integration to advance as it has.⁶

A lot more could be said about Streeck's reflections on the EU, which are certainly not themselves incontestable. For instance, if the EU really is best understood as the institutional exemplar par excellence of neoliberal worldmaking, then this cries out for an explanation of why multiple influential neoliberal groups have energetically opposed the EU, and the European Economic Community it grew out of, over roughly three decades, and continue to do so today.⁷ In what follows, however, I want to remain focussed on the bigger picture of Streeck's crisis theory and its core attempt to identify long-running transformations cutting across all Northern societies by keeping with the historiography of neoliberal crisis that I have traced out in the previous section, even while focussing the discussion by digging down further into something that this historiography ultimately leans on.

What we find tucked into Streeck's historiography of neoliberalisation over the last half century is a genealogy of its emergence that is underpinned by some arguments and assumptions that we do well to throw into relief. When considering how this genealogy fits into the broader historiography, I believe we find that what Streeck really offers us in his crisis theory is a predominantly mechanistic or hydraulic account of large-scale social change. This is an origins story in which economic developments – inflation early in the 1970s, driven by strong labour and welfare demands – led to the broader neoliberalisation process that followed due to a backlash by capital interests that has dragged Northern societies through a series of stages of politically unmanageable ruin.

Streeck obviously knows that, in some sense, decisions were also made at crucial points along the way by politicians in response to these developments. Even so, on his account this was ultimately all subject to the same futile logic of ‘buying time’. Buying time took three basic forms. First, that of an indulgence towards inflation for fear of confrontation with organised labour. It then buckled under the inflationary strains of the 1970s, giving rise to a retaliatory crushing of labour in the 1980s even while public debt soared due to fear of saddling a newly stampeding business class with high taxation and other constraints. In a third mutation, complementing the neoliberal fiscal consolidation attempts beginning in the 1990s, it led to the courting of private credit to counterbalance public debt.

Though not always fully explicit, we should notice that there is an elementary depth model behind all this political complexity, which we might think of as a sort of market tectonics. Streeck believes that these heterogeneous political elements all belong to a single family of delaying tactics, all of which were unable to bear up in the face of inevitable and overwhelming economic pressures that could only be diverted for so long, and that finally forced their way through in the 2008 crisis and its immediate aftershocks. In the next three sections of this article I will begin to question, from different angles, this framing of the political. But, still reading Streeck on his own terms, we should look a little closer at what the transmission mechanism from the economic to the political is here, and how the economic is assigned temporal and causal priority. In one particularly illuminating statement we find a condensed summation of the assumptions that help us better grasp the genealogical nucleus of Streeck's wider historiographical analysis of capital crisis through neoliberal reform:

As Hayek never tired of pointing out, accelerating inflation is bound to give rise to ultimately unmanageable economic distortions in relative prices, in the relation between contingent and fixed incomes, and in what economists refer to as ‘economic incentives’. In the end, by calling forth Kaleckian reactions from increasingly suspicious capital owners, inflation will produce unemployment, punishing the very workers whose interests it may initially have served. At this point at the latest, governments under democratic capitalism will come under pressure to cease accommodating redistributive wage settlements and restore monetary discipline. (Streeck 2016: 79)

Here we find Streeck pointing above all to unmanageable inflation triggering the long process of neoliberalisation, initially by ‘calling forth Kaleckian reactions’; that is, leading business to use the threat of withholding or relocating investment (sometimes referred to as ‘investment’ or ‘capital’ strikes) as a cudgel to batter politicians into dismantling the tax state and instituting the sorts of policy reforms and political-economic rewiring that Streeck associates with neoliberalisation in the debt and consolidation states. This, for Streeck, is the crucial moment of economic disembedding that led to the slow-motion deluge that followed.

This is not to say that Streeck is at all times a perfectly coherent theorist of crisis, and reading Streeck against the grain of his own general crisis narrative can be informative. Here we find an important complexity: Streeck also knows that politicised worker organisation, peaking in many Northern societies in the late 1960s already, stands somewhere at the beginning of the crisis sequence he identifies as taking hold from the 1970s on. Moreover, Streeck (2021: 123–125) has also recently noted that political mobilisation in the North is again on the rise, and he appears to have quietly dropped some of the intense scepticism in his early crisis theory about the possibility of counter-movements again seriously putting a break on reckless capital accumulation – hence my earlier description of Streeck's ‘recent’ crisis theory as only loosely fitting into the genre.

While still persuaded by the claim, first arising in his early crisis theory, that the neoliberal freeing up of capitalism to its own reckless pursuit of gain has propelled contemporary societies worldwide into a sort of Gramscian ‘interregnum’ apparently leading out of capitalism (Streeck 2021: 23), Streeck no longer speaks about such things as the ‘pulverisation of collective agency in the course of the neoliberal revolution’ (Streeck 2016: 12, n.15). Still, what always counts most for Streeck when explaining the emergence of neoliberalisation is that, from its inception to the present, it has been buffeted from crisis to crisis by economic motives and by political failures to implement a sustainable fix to market disembedding. In what follows, I explore what this line of thinking suppresses.

The Politics and Economics of Northern Crisis

Sticking, for now, to the experiences of Northern societies in the 1970s, I want to suggest another way of looking at the crisis tendencies of the time, even while keeping in focus the issue of inflation that Streeck gestures at. What came to be known as the ‘Great Inflation’ was no trifling affair, and Streeck is quite right that accounts of the decay of post-war social democracy do well to reckon with its effects. It was the largest recorded inflationary period in over two centuries outside of wartime or immediate post-war conditions, and at the time became an obsessive focus of economic, political and social life (Eich 2022: 179). Nonetheless, the context in which the Great Inflation emerged, grew and was ultimately resolved is essential, and has a great deal to do with two major convulsions that remain peripheral to Streeck's crisis theory.

The first of these events was the release of capital controls during the so-called ‘Nixon shock’ of 1971. As is well known, Nixon suspended the fixed dollar parity with gold in 1971, thereby kicking away one major pivot of the Bretton Woods institutional order on which the tax state and the post-war social-democratic settlement of embedded liberalism was very reliant. This decision triggered a series of events that saw major currencies floating against one another by 1973 after some failed attempts at restabilisation, while also unintentionally inflaming rather than taming domestic inflation in the USA. Streeck knows that this is in some sense important and makes some throwaway references to such things as ‘the incipient breakdown of the international monetary system’ in the 1970s by way of allusion to it (Streeck 2014a: 1). Yet such events always remain near to invisible, completely dissolved away into the flat and neat historical time that we find in Streeck's crisis theory, in which large-scale social change is reckoned only in a few distinct progressions of a linked sequence.

Leaping to the other end of the 1970s, another colossal event helped to consolidate the emergent financialisation of the times. This was the so-called ‘Volcker shock’ of guided inflation reduction by the US central bank, the Federal Reserve. The Volcker shock was the financial equivalent of a shock-troop assault on the US inflation that had built up until then, using a highly complex set of monetary practices that focussed principally on controlling the amount of money in circulation rather than short-term interest rates. The shock, which quickly had global effects, climaxed between October 1979 and the Mexican debt default in August 1982 that soon brought on a far broader Southern debt crisis due to the dollar being the principle global currency of trade and finance. It was presided over by Paul Volcker, president of the Federal Reserve from 1979 until Alan Greenspan took over in 1987. Streeck (2016: 79, 81; 2021: 68) mentions entirely in passing that the Volcker shock in some sense precipitated a major change in global political economy. As with the Nixon shock, however, Streeck never pauses to examine it and appears to assume that it folds unproblematically into the larger narrative that he builds up in his crisis theory.

One way of coming to our own critical appreciation of Streeck's crisis theory is to notice such moves and question whether this type of assimilation, which greatly simplifies the work of theorising large-scale events, might come at an undesirable cost. Starting with the Nixon shock that ruptured the Bretton Woods financial order, we do well to hold open the important question of why the decision was taken. One clear cause is the Nixon administration's desire to throttle the inflation that had emerged already in the late 1960s as a result of multiple causes, like the mounting costs of the Vietnam War and greatly increased spending on health, social security, transportation and education, much of which the administration had inherited from its predecessors. It is commonly also argued that the decision to close the gold window was wound up with a range of financial and trade concerns: increasing dollar speculation; fear of a run on the US gold reserves that could not be redeemed as dollar printing increased and inflation ate into the dollar's value; and a desire to be freed from monetary constraints that weakened US exports as the economic recovery of the European Economic Community (the forerunner of the EU) and Japan after the war meant that by 1971 the US had fallen behind in global competitiveness and run its first trade deficit in a century (Roberts 2010: 26; Helleiner 2017: 211–212; Frieden 2007: 339–342).

All these economic concerns do appear to have played a role in guiding policy and overlooking them would be unwise. But recent research into the Nixon shock also reveals a deeply political background to the decision, with the domestic US context also appearing to have weighed heavily on the final decision to remove the dollar peg. With an election coming up the next year that threatened to go badly wrong for Nixon's republicans, the administration possessed a self-interested desire to demonstrate to local electorates that, along with the import duties and price and wage controls that it also imposed at the time, it was committed to taking bold strides in the fight against inflation (Zeiler 2013: 188–208). Even more focussed, blow-by-blow accounts of the deliberative background to the eventual decision, based on extensive White House recordings of policy discussions by Nixon and his advisers that are now in the public domain, are also revealing. They show clear divisions even within the Nixon inner circle of policy advisers over the policy choices open to them, while adding force to more politically weighted arguments for finally taking the dollar off gold (Ohlmacher and Butkiewicz 2021: 922–943; Abrams and Butkiewicz 2012: 395).

Like all major historical events seen in retrospect and subject to extensive study, one can also come at the Volcker shock at the end of the decade from a multitude of angles. Despite failing to show much interest in it, Streeck views this as the point at which indulgence towards inflation by politicians, as a delaying tactic, gave way to systemic economic pressure that very quickly opened a breach for the swing to the right around 1979 that tends to be associated with names like Thatcher and Reagan.⁸ Here a strong determinism creeps into Streeck's account of the times. We know in retrospect that monetarist disinflationary strategies fully emerged in 1979 as the leading disinflationary technique, with brutal effects on labour, but there was nothing pre-scripted about this. In Europe, even pioneers of monetarism like the technocratic and political clique around the West German Bundesbank had to push through walls of opposition at home by rolling out a concerted campaign of persuasion between 1967 and 1981, while elsewhere in Europe monetarist solutions to inflation were even initially opposed by the extremely conservative Tories in the early 1970s, who preferred the established measures of inflation reduction through wage and price controls (Tooze and Eich 2016: 176–177).

A near-identical dynamic was in play in the USA itself. In a perceptive article that Streeck (2021: 68) himself has recently cited, though without seeming to register how this cuts against the grain of his own reflections on the genealogy of neoliberal crisis, Tim Barker (2019) points out that wage and price controls also had a long history there. They had been compulsory during the Second World War and the Korean War, had operated as informal guidelines under the Kennedy and Johnson administrations, and had been authoritatively imposed again under the Nixon administration between 1971 and 1974. Reading Barker's observations helps us see that, while certainly working within a field of constraints, here too a real choice was made by those with political power rather than an essentially mechanical reaction to economic compulsion. This was a conscious decision to prioritise monetarist forms of disinflation, which was certain in advance to lead to spectacular unemployment, over other solutions that would have also had a disinflationary effect but would have entailed a clampdown on the profitability of business owners. Insofar as there was a class dimension to the Volcker shock, we can say, it was made to happen by political means.

It was also a decision made with political ends in sight, which existed alongside its economic ends. Greta Krippner has shown that throwing Volcker at the problem of inflation came down to an expedient decision by politicians, some true believers in the economic necessity of what they were doing and others more sceptical, to make a decisive move of enormous consequence behind the cover of the new financial elites. For instance, Charles Schultze (quoted in Krippner 2011: 117), chairperson of the incumbent Carter administration's Council of Economic Advisers when the decision was taken, was not convinced of Volcker's economic astuteness, but he did think that ‘Volcker was fundamentally right about the politics of it’ and explicitly saw such technocrats as sandbags against political sniping. More generally, the Volcker shock was consonant with the emerging political drift toward governing ‘at a distance’ in many crisis-ridden societies of the time, when the benefits of inserting a layer of politically appointed but nominally impartial experts as a buffer between the political class and the demos were becoming more apparent (Krippner 2011: 108, 115).⁹

Southern Contexts of Northern Crises

When trying to properly understand the inflationary chaos in the North and the breakthrough of neoliberal policy and ideas through the Nixon and Volcker shocks, one cannot get far at all without also understanding the two major oil shocks that rippled out of the South in-between, as well as some of the political and economic context in which these shocks themselves emerged. Streeck (2014a: xi, 28) is at least peripherally aware that the Northern inflation of the 1970s was in some way inflamed by the oil shocks. He has also recently mentioned how the United Nations became one of the primary sites for debating calls for the global reregulation of world trade and property regimes, culminating in a 1974 call backed by the large bloc of Southern states for a New International Economic Order (Streeck 2021: 282–283). Yet neither of these are connected to one another or placed in context, and indeed are not explored at all. They are mentioned entirely in passing and in what appears a purely anecdotal manner, with no visible connection to the broader narrative spun in Streeck's crisis theory. As with the Volcker and Nixon shocks, a brief look at what lies buried here can be informative.

The first of the two major oil shocks to roil the global political economy of the 1970s began life as an attempt at renegotiating the terms on which a cartel of seven Western oil producers, five from the USA, extracted oil in the gulf states. By the 1970s, oil production had become central to energy demand and the wider production, trade and consumption networks it supported in the wealthy North. Among the many reasons for first undertaking renegotiation of the property arrangements underpinning this system was the financial hit that the petrostates took when the dollar, as the currency in which they received most oil payments, devalued after the Nixon shock, which was a problem widely debated at the time (Garavini 2019: 200–203). Renegotiation was led by the self-identified Arab members of the broader Organisation of Oil Exporting Countries (OPEC) group, beginning in 1971 and culminating in the nationalisation of the oil fields in 1974 in what may well constitute the ‘largest non-violent transfer of wealth in human history’ (Steven Schneider, quoted in Priest 2016: 118).

The peak of the first shock was in 1973, when this group of OPEC states, working through the separate but overlapping Organisation of Arab Petroleum Exporting Countries (OAPEC), first determined to raise oil prices. Then, partially in direct response to Nixon's decision to earmark $2.2 billion as a gift to the Israelis during the so-called Yom Kippur or Arab–Israeli war of 1973 that pitched the state of Israel's military in Israel-Palestine against those of Egypt and Syria, they also launched a major oil embargo, initially targeting the USA and a number of other Northern countries seen to be complicit with it in the war, but later also taking in the colonial redoubts of Portugal, Rhodesia and South Africa, sparking a major trade crisis that was only resolved in 1974 (Garavini 2019: 217–219). By 1973 the oil shock, then at its peak, was accompanied by surging global prices for other commodities too: raw materials essential to multiple manufacturing processes, like copper, zinc, phosphates and wood, along with agricultural goods like coffee (Garavini 2007: 311). The leap in commodity prices was a major problem for both Northern and Southern countries in different ways and fed directly into the turmoil of the Nixon years and much of the inflationary drama that followed throughout the 1970s and early 1980s.

A ‘second’ major oil shock emerged at the end of the 1970s. It took shape around the Iranian Revolution of early 1979, when the previous year's uprisings culminated in the second shah's abdication and the installation of the Khomeini regime. This too fed into Northern inflation, and thereby also played a part in the eventual Volcker shock that followed. Like the earlier oil shock, it also helped engender Southern debt entrapment for those countries not benefitting overall from the new commodity price rises, with the debt-servicing costs of Southern countries surging by around one thousand per cent between 1971 and the Southern defaults beginning in 1982 (Koram 2022: 49). From the early 1980s this would strip away the bargaining power of many Southern countries when seeking more equitable terms of commodity trade and other measures supporting what were seen from the South as economic decolonisation.

As with the Nixon and Volcker shocks, the two oil shocks of the 1970s were not self-propelling economic events into which political decision-makers only intervened downstream. These oil shocks were themselves part of an intricate tug of war between various groups in the South and North that has to be understood by considering the position of multinational corporations from the North, often still operating on colonial-era land and raw materials concessions, and how they became snared up in wider forms of struggle for both political and economic independence in the Global South in a time of cascading decolonisation and against the background of the Cold War.

In the 1960s, as companies in many OECD countries began rapidly expanding their overseas operations, many Latin American countries started setting stricter entrance conditions for multinationals wishing to set up there (Krasner 1985: 179–181). This was not always a function of import-substituting strategies and was also tied up with the formation of regional trade agreements. Even more alarming for Northern multinationals, however, were property expropriations in many Southern countries between the early 1960s and early 1980s that dramatically peaked in the early 1970s. These often took the form of nationalisations linked to the wider post-world war decolonisation processes in Africa and Asia while reflecting a more strident assertion of Southern sovereignty that included much of Latin America too (Minor 1994: 180, 182).

The renegotiation process beginning in 1971 that stood behind the first oil shock needs to be understood in this broader context, with OAPEC and the Arab members of OPEC themselves being very actively involved in wider networks of Southern solidarity seeking to politically reshape global property and trade regimes, often using Cold War non-alignment as leverage for evading Northern reprisals. In the specific case of oil, where the largest successes in this regard were registered, renegotiation and nationalisation were tools for opposing extractive regimes established in the 1920s and 1930s, forming the core of what one of the most important historians of oil politics calls ‘Anglo-American petrocapitalism’ (Garavini 2019: 302). The oil embargo of 1973 to 1974 was obviously also a politicised intervention into politics in the Middle East in the context of war. The Saudis, under King Faisal at the time, largely took the initiative in all this, and Faisal was himself keenly appraised of larger Southern resistance movements. He had a special closeness to revolutionary Algeria, also an OPEC-affiliated petrostate, and its leader, Houari Boumédiène. From the 1960s, Boumédiène had set his country up as among the most influential of many champions of resource nationalisation and Southern political interests more broadly (Garavini 2019: 171, 219). It was no coincidence that the declaration of the New International Economic Order in the UN General Assembly in 1974 was led by Boumédiène. Expanded resource control for Southern countries was one of many proposed reforms to global property and trade regimes being championed at the time by large coalitions of Southern elites in and around the non-aligned and G77 groups. They sought to emulate OAPEC/OPEC's successes even while gaining further ground through ongoing renegotiation and nationalisation of Northern property and resource extraction in the South, alongside many other proposed reforms (Ogle 2014: 218).

The political element in the economic upheavals of the time is evident also, of course, with the Iranian Revolution and the ‘second oil shock’ accompanying it. The second oil shock already began to bite before the revolution climaxed, with a strike of oil workers in late 1978 massively disrupting what was an estimated average of nine hundred thousand barrels of oil being sent daily to the USA alone. The strikes were political in nature, calling for the release of political prisoners and the arrest of corrupt officials. Neither the industrial working class nor the peasantry played much of a part in the revolution, which was finally led by more politically engaged Shi'ite clerics and their followers making common cause with different middle-class, urban groups. Among many grievances were the shah's closeness to the USA, which was critiqued from both a religious and a secular, ‘developmentalist’ perspective. Soon Abolhassan Bani-Sadr, a revolutionary activist opposing Northern imperialism and author of Naft va Solteh (Oil and Domination), became the first president of the new republic. Regional geopolitics also mattered and, shortly after the revolution, Iran's invasion of Iraq in 1980 fed into the existing economic problem of lowered oil production generating surging prices that quickly had a global effect (Arjomand 1986: 392–402; Carlisle et al. 2017: 128–131; Garavini 2019: 290–291).

In trying to understand the mechanisms through which these events were globally transmitted and eventually fed into the tumult of the Great Inflation in the North, we can also identify both apparently contingent events and longer-running causal sequences growing out of more deliberate policy orientations. Giovanni Arrighi (1994: 38, 300–314; 2007: 133–135) has argued that forsaking the Bretton Woods dollar peg to gold was influenced by a larger financial crisis sequence with inflationary consequences that had built up from the 1950s in the context of Cold War tensions but became unmanageable from 1968 to 1973. A crucial part of this larger financial story is the growth of the offshore ‘Eurodollar’ markets in which dollar-denominated deposits held outside of the USA and effectively beyond regulatory control were traded, fed from the 1950s by Soviet Bloc deposits used for productive investment and trade with the North and parked outside of the USA for fear of monetary seizure there. The quantity of money in these very liquid markets had surged by 1968, due primarily to increasing reliance on them by US multinationals during the 1960s, whose own expansion was an outgrowth of US military Keynesianism¹⁰ projected onto a global geopolitical field. The swelling of unregulated financial pools increasingly fuelled private financial speculation, hitherto tolerated as an asset to global trade in which US corporations enjoyed dominance, to such an extent that it began to interfere heavily with the minimum of currency stability required for the maintenance of stable US trade relationships and the inter-governmental trust tied up with them. In addition to pragmatically adapting to the unintended consequences of these speculative monetary flows, knocking out the dollar peg was motivated above all by a desire to release US Cold War adventurism in the ‘Third World’, then centred in Vietnam, from these monetary constrictions. This succeeded, in the very short term, in boosting US spending power but it soon picked up an inflationary tailwind that with the unanticipated oil crisis of 1973 became cyclonic.¹¹

From 1973, alongside inflation, a crisis of faith in the dollar also began to build up for multiple reasons, including the further swelling of speculative flows fed by money from the newly wealthy Arab oil countries flooding into the Eurodollar markets (Arrighi 1994: 316–320; 2007: 144–145, 155–160). Then, at the end of the 1970s, the dramatic 1979 oil crisis in Iran was itself inflamed from early on by a new range of unanticipated political and economic events: panicked ‘animal spirits’ on the part of Northern traders and consumers gripped by deep fear of a repeat of the first shock's price chaos and stockpiling, political uncertainty about whether the revolution might have regional spillovers and what might follow from the anti-Western uprisings in Saudia Arabia and Russia's invasion of Afghanistan – the first mass mobilisation of Russian military power beyond the Soviet Bloc since the Second World War – as well as wariness about the viability of transitioning to new energy sources, exacerbated in part by a purely coincidental nuclear accident in the USA's Three Mile Island nuclear plant in March 1979 (Yergin 1991: 685–691, 701). To understand the severity of the Northern Volcker shock, it is necessary to see how all these events concatenated, releasing political and economic pressures that traversed the North and South.

Elite Worldmaking and Neoliberalisation

The historical observations made in the two preceding sections, while making no pretence at comprehensiveness, suggest two general ways in which we might take some distance from the framing assumptions informing Streeck's genealogy of neoliberalisation and the historical oversights that accompany them. First, Streeck's crisis theory fails to register that important form of spatial complexity that is sometimes discussed in terms of historical ‘entanglement’ between different societies and world regions. Consider again the two historical developments that Streeck invokes as the original context for the emergence of neoliberalisation: inflation driven by worker demands and the retaliatory investment ‘strikes’ that launched the long process of neoliberal market disembedding. Streeck tells us surprisingly little about the complexly interrelated origins of inflation, which were not just found in post-war Northern struggles over labour and welfare conditions but also in such things as the enormous war effort in Vietnam, as well as in major political and economic developments in the South like waves of nationalisation and the Iranian Revolution. The broader Cold War financial and military transformations of geopolitics and geoeconomics and the transmission mechanisms through which these upheavals bound the North and South are perplexingly absent from Streeck's reconstruction of the long, interwoven history of capitalism and democracy since the 1970s. Nor does he explore how top-down political decisions in response to inflation were actually taken. There is simply no attempt to explore the confluence of political and economic motivations and practical ends in play, along with a complex mix of both intended and unintended consequences. Similarly, Streeck's vague appeal to ‘Kaleckian reactions’ or investment ‘strikes’ by business communities is strikingly thin. Streeck never considers their actual histories in any sustained way aside from some very abstract theorising in relation to the footloose owners of financial capital, whom he calls the ‘people of the market’ (Marktvolk) (Streeck 2014a: 81–90).¹² He thus fails to register the tremors sent through the world of trade, and trade regulation and diplomacy, by the Southern renegotiation and nationalisation processes that climaxed in the 1970s, resulting in head-on collisions between Southern political regimes and Northern businesses along with more mediated attempts at finding viable settlements.

While I have tried to draw attention to some of the places in Streeck's crisis theory in which something of this nature does momentarily flicker into sight – in passing mentions of the oil shocks and of the mobilisation for a New International Economic Order – this is always limited to strikingly brief and apparently anecdotal asides that are simply never explored. This oversight or evasion appears to leave his entire approach to the problem of accounting for neoliberalisation open to accusations of arbitrariness at the level of its most basic assumptions. What gets lost here is the sort of perspective-taking that concepts like ‘entangled accumulation’ gesture at (Goncalves and Costa 2020). This is itself a variant of many more established discussions of ‘primitive accumulation’ or ‘accumulation by dispossession’ – the violent domination preceding or accompanying less materially violent forms of exploitation – and other adjacent concepts, which provide different ways of escaping perspectival blinkering in the study of spatially messy forms of accumulation, as does the similar but broader concept of connected histories (Subrahmanyam 1997) or histoire croisée (Werner and Zimmermann 2006).

The concept of ‘entangled accumulation’ emerges from recent revivals and extensions of the Marxian literature but is cautious to avoid potentially problematic economic reductionism while making a case for paying more attention to the experiences of post-slave and post-colonial societies as an important pivot of global capitalist emergence as well as the employment of legal and other forms of power to accumulate wealth there. The essential intuition behind appeals for connected history or histoire croisée is a need to adapt analytical concepts to render them more congruous with multiple real-world forms of societal interchange, including spatially messy processes of accumulation. Despite their differences, these concepts have emerged to help social theorists think in a more temporally and spatially joined-up way about social reproduction and change, while also moving beyond purely comparative theoretical approaches to the theme, which assume a practical separation between the units of analysis that has little extra-theoretical purchase when applied to historical periods of relatively significant connection through conquest and trade or other bonds like those of large-scale migration and major regional alliances.

A second reductive feature of Streeck's crisis theory that invites concern is its excessive economism, which crowds out any deep consideration of epistemic and political drivers of large societal transformations in general and of neoliberalisation in particular. Here I will focus on the latter, political dimension of this problem in light of the historical observations in the previous two sections, which also do no more than hint at the enormous epistemic complexity that accompanied the four shocks of the 1970s and the broader Cold War upheavals they were embedded in but do draw out attention to a part of the political context of these shocks.

Streeck is not unaware of or uninterested in politics. But, as we have seen in the foregoing, this is often thinly sketched and locked into the margins of his crisis theory, where the tectonics of the market are clearly what matter most. Market dynamics undoubtedly have shaped the rise of neoliberalisation, but the gain in theoretical simplicity that comes of extricating them from their political context and setting them up as first movers comes at its own cost. To even begin to do justice to the political complexity of neoliberalisation, one has to adequately grasp the ‘field of adversity’ – that is, ‘the overall logic of the set of enemy obstacles or adversaries’ – in which it arose (Foucault 2008: 107). For Streeck, whose constricted scope of spatial inquiry we have considered thus far, the only field of adversity of any sustained interest in explaining the institutional breakthrough of neoliberalisation is the obvious one of Northern groups defending labour and welfare rights and norms.

While only skimming the surface of historical events in this article, it should already be clear that an array of Southern political elites, seeking to extend their sovereignty in the peculiarly enabling conditions of the Cold War, decolonisation and emergent Southern forms of non-aligned solidarity, directly played a part in the emergence of Northern experiences of the Great Inflation. The oversight of such vast domains of political experience, I have suggested in my foregoing critique of Streeck's crisis theory, can be taken as one instance of what Arrighi (2007: 132), with his sophisticated awareness of geoeconomics and geopolitics as practically co-constitutive historical forces and explicit hostility to both Eurocentric and economistic critical reductionism when critically reconstructing the central elements of historical crises, considers the ‘virtual eviction of world politics from the analysis of capitalist dynamics’. This is often encountered even in sophisticated political-economic treatments of crisis and large-scale transformation, where the political end of the dyad is nudged into a causally epiphenomenal, at times near invisible, attenuation of its economic end.

Even if we do prefer to remain focussed on Northern societies alone, the kind of conceptual and historiographical streamlining that comes from explaining neoliberalisation as ultimately a playing out of market tectonics comes at the price of historical insight into the political and economic co-constitution of the neoliberal field of adversity. In the case of the Nixon shock, this was rather banal: a simple concern with gaining domestic political prestige that inter-mingled with the economic considerations that also motivated the break with the Bretton Woods currency regime. The political logic of the Volcker shock is more convoluted, as we saw earlier in the discussion of the emerging art of governing ‘at a distance’. Another way to view this, in order to further bring out its political character, is as an early form of the ‘politics of depoliticisation’ that Peter Burnham (2001) has famously diagnosed.¹³ This is the art of creating large-scale societal order that frequently employs top-down political means in pursuit of the end of weakening bottom-up political interference into both the political and economic running of social orders. One enduring depolitical form, which is compatible with the privatisation of state entities, is that of inviting carefully selected experts to intervene ever more directly into the running of these orders under a veil of impartiality that obscures the generally very partial criteria of selection and actual or potential dismissal that all those directly involved are always aware of.

Such complexities are worth bearing in mind so that we refrain from too easily accepting the critical common sense that Streeck (2016: 228; emphases in original) uncritically reproduces when viewing neoliberalisation as simply the apotheosis of the inherent logic of deregulated or disembedded capitalism, and the latter as a kind of unmoved mover, a ‘self-driven social process’ best understood as ‘an anarchic regime of economic action that is a problem for government and politics rather than its product’. A more realistic view of neoliberalisation, of the sort I have tried to suggest throughout, would do better to view it in a manner that resists this economic reductionism.

From this perspective, while there is always room to debate the specific set of policies we choose to lump under this label, neoliberalism is best viewed as one specific set of conjoined political and economic repertoires of both statecraft and ‘marketcraft’ (Vogel 2018) first arising in a globally complex field of adversity and unfolding over time through a mixture of careful planning and improvised fumbling through in response to unforeseen crisis tendencies and the unforeseen consequences of crisis management. Reifying appeals to the inherent dynamics of capital accumulation point toward something interesting but also something that is too static to compellingly explain much of the real-world admixture of historical hazard and consolidated mobilisations of power across sprawling fields of spatial interconnection that have attended the emergence of neoliberalisation.

Conclusion

Streeck's crisis theory is built around a historiography of neoliberalisation, with a more focussed genealogy discernible at its centre. In this story, the disembedding of markets over the 1970s in response to the crisis of inflation triggered by assertive labour and welfarist claims set up a connected chain of attempts to address the crisis, all eventually failing to forestall the likely collapse of global capitalism itself after the crisis of 2008. I have focussed on the genealogy of this disembedding moment, arguing that Streeck's account of it assumes a picture of history that is neat and linear rather than messy and bent this way and that by events like the great shocks that clustered into the 1970s. In telling this tidy story, two forms of historical complexity are squeezed out: it has nothing of substance to say about the entangled histories in which these shocks emerged through ricocheting lines of causality that traversed the global North and South; and it assumes that great tectonic shifts in market regulation explain political shifts, while closer attention to these transformations suggests a considerably more complex pattern of emergence. Though all ambitious social theorising requires some ordering strategy for closing out the wilderness of historical becoming, reading Streeck's crisis theory reminds one that there are times when we might want to let just a little more of it in. To say this is in no way to dismiss the intellectually impressive body of research into neoliberalisation and crisis that Streeck has developed over the last decade. It is one of many excellent resources for entering into conversations on this important theme, but the conversations themselves should take us far beyond what we find there.