The Terms of the Neo‐Liberal Consensus

And so the most spectacular crash of the world's most neo-liberal government ushered in the neo-liberal consensus. From now on both major contending parties in the British state accept the essential neo-liberal tenets: markets should rule under the guidance of entrepreneurs, with minimal intervention from government; taxes and public spending, and in particular the redistributive effect of direct taxation, should be kept down; and trade unions should have as marginal a role as possible. However, the bounds of the new politics are set by landmarks familiar from the start of the twentieth century, the spectrum of the consensus running from nationalist neo-liberals on the right to social neoliberals on the left. It is also a politics framed by class; the fact that the manual working class has passed its historical peak does not mean an end to class politics, only a major change in its shape. Postwar history can now be read as follows. For thirty years after 1945 the needs and capabilities of the manual working class set the terms of a basic Keynesian economy. There was broad consensus over the form of this, parties contending over the precise balance of social policy and taxation, the degree of redistribution to be aimed at, and the extent of steering to be given to markets. As the working class declined in strength in the 1970s and 1980s, the class of global financial capital rose to pre-eminence and economies underwent a major restructuring. Consensus broke down and was replaced by a confrontationÐ seen at its sharpest in BritainÐbetween anti-Keynesian neo-liberalism and a hopelessly defensive labour politics. The thoroughly successful installation of a British Labour Government that has managed to escape that politics and come to terms with the new hegemony restores consensus, but one based on the principles of neo-liberal market freedom.