Privatised Keynesianism: An Unacknowledged Policy Regime

TLDR

Since WWII, two policy regimes—first Keynesian public demand management, then a privatised Keynesian system combining markets with housing and debt—have temporarily stabilized capitalism’s uncertainties. The study explores the likelihood that a new regime based on corporate social responsibility will replace the unsustainable privatised Keynesian model. The privatised Keynesian combination succeeded in reconciling capitalism’s problems but proved unsustainable.

Abstract

There have now been two successive policy regimes since the Second World War that have temporarily succeeded in reconciling the uncertainties and instabilities of a capitalist economy with democracy's need for stability for people's lives and capitalism's own need for confident mass consumers. The first of these was the system of public demand management generally known as Keynesianism. The second was not, as has often been thought, a neo-liberal turn to pure markets, but a system of markets alongside extensive housing and other debt among low- and medium-income people linked to unregulated derivatives markets. It was a form of privatised Keynesianism. This combination reconciled capitalism's problem, but in a way that eventually proved unsustainable. After its collapse there is debate over what will succeed it. Most likely is an attempt to re-create it on a basis of corporate social responsibility.