[Part 8]Neoliberalism broke economics by reducing a profoundly complex discipline into a narrow faith in market efficiency, deregulation, and individual self-interest, leaving little room for social realities, historical contexts, or human vulnerabilities. For decades, mainstream economists under the neoliberal wave celebrated abstract models that assumed rational actors and perfect markets, while dismissing inequality, environmental damage, and systemic crises as peripheral issues. The financial crash of 2008 revealed the bankruptcy of such thinking, as entire nations were plunged into turmoil due to the very deregulated financial systems economists had praised as efficient and self-correcting. What was once supposed to be the science of understanding how societies allocate resources became instead a technocratic ideology that served corporate power, eroded public trust, and legitimised austerity measures that punished the vulnerable while protecting the wealthy. In this sense, neoliberalism did not merely distort economics—it hollowed it out, stripping it of its moral purpose and reducing it to a servant of global capital.Neoliberalism broke economics not simply as a matter of flawed theory, but as a deliberate political project that turned economic thinking into an instrument of power. From the late 1970s onward, economic orthodoxy shifted away from Keynesian ideas of state responsibility and collective welfare, and embraced the notion that markets, if left to themselves, could efficiently organise society. This belief was canonised in policy through the deregulation of finance, the privatisation of public assets, and the weakening of labour protections, measures justified by economists who claimed to be merely “scientific” but were in fact acting as ideological gatekeepers. As Philip Mirowski argues in Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown (2013, Verso), neoliberalism did not retreat in the wake of the 2008 financial collapse; rather, it used the crisis to entrench itself more deeply, shifting the blame onto governments and households while sparing global finance.
Mirowski begins his work by situating neoliberalism as more than an economic doctrine; he insists that it is an intellectual project, a political strategy, and a cultural force capable of reshaping societies far beyond the confines of traditional economics. He stresses that neoliberalism is not merely about markets but about remoulding human beings themselves to think and behave as if they were entrepreneurs of their own lives. By doing so, he places the discussion of the 2008 financial crisis in a wider intellectual history rather than treating it as a simple collapse of banking institutions.He then explores the paradox of how neoliberalism, which seemed utterly discredited by the crisis it had largely engineered, managed not only to survive but to emerge stronger. He rejects the conventional wisdom that neoliberalism is simply about laissez-faire. Instead, he shows that it thrives on constructing strong institutional frameworks, cultivating think tanks, and using crises as moments of political opportunity. This, for him, explains why the 2008 crash did not produce the end of neoliberalism but, rather, its reconfiguration.Mirowski next criticises the failure of mainstream economics. He argues that academic economists displayed no capacity to foresee or explain the crisis, yet their authority remained intact. He attributes this to the deeply entrenched neoliberalisation of the academy itself, where dissenting voices were marginalised, and the economics profession was systematically shielded from accountability. This, he claims, represents a triumph of ideology over empirical failure.He proceeds to investigate how neoliberalism appropriated the language of science and cybernetics to strengthen its hold on society. He contends that neoliberalism learned to present itself as flexible, adaptive, and technocratic, while portraying its critics as rigid and outdated. The movement appropriated metaphors of networks, information, and self-regulating systems to naturalise its worldview. This rhetorical move allowed neoliberalism to survive intellectual scrutiny even when its empirical claims crumbled.Another strand of Mirowski’s argument centres on how neoliberalism deliberately cultivates confusion. It flourishes not by offering clarity but by fostering contradictory ideas: markets are natural yet require strong state intervention, individuals are free yet permanently monitored, competition is spontaneous yet constantly engineered. This strategic inconsistency, he explains, disarms critics and prevents coherent opposition.He also targets the political left, accusing it of intellectual weakness and strategic disarray. Instead of formulating a strong alternative, many left-leaning thinkers attempted to accommodate neoliberal assumptions, thereby reinforcing its dominance. The absence of a coherent counter-narrative allowed neoliberalism to present itself as the only viable framework after the financial meltdown.Towards the end, Mirowski addresses how neoliberalism managed to turn the crisis into an opportunity for deepening financialisation and extending surveillance. The state bailed out banks while austerity was imposed on populations. At the same time, neoliberalism expanded into everyday life, promoting ideas of personal responsibility, entrepreneurial identity, and digital self-tracking. The crisis, far from being a setback, became a platform for intensifying neoliberal restructuring.Finally, Mirowski closes with a provocative reflection: neoliberalism’s resilience stems from its ability to redefine reality itself. It does not merely survive crises; it converts them into fuel for its reproduction. What appears as contradiction or failure is, in fact, the secret of its strength. By exposing this logic, Mirowski argues that critics must move beyond simplistic calls for “more regulation” and confront the deeper ideological mechanisms that sustain neoliberalism.Similarly, David Harvey in A Brief History of Neoliberalism (2005, Oxford University Press) demonstrates how neoliberalism has been less about liberating markets than about restoring class power to economic elites, eroding democracy and public accountability. The tragedy of economics under neoliberalism is that it ceased to be a social science concerned with human flourishing, and instead became a kind of market theology that normalised inequality and legitimised austerity. In this sense, neoliberalism did not merely “break” economics—it colonised it, stripping away its ethical core and leaving a hollow shell that serves global capital above all else.
Harvey begins his book by explaining neoliberalism not simply as an economic doctrine but as a political project aimed at restoring class power to economic elites. He outlines how neoliberalism presents itself as a system of individual freedom and market rationality, yet in practice it restructures societies in ways that deepen inequality, dismantle collective protections, and privilege capital over labour. This framing sets the stage for his historical and critical exploration of how neoliberalism took hold.He then turns to the intellectual origins of neoliberalism, tracing its roots in the writings of Friedrich Hayek, Milton Friedman, and the Chicago School. Harvey emphasises how these thinkers positioned the market as the ultimate arbiter of social order, while casting the state merely as an enforcer of market discipline. Yet he also shows how their abstract theories were mobilised politically to counter Keynesianism and post-war welfare states, creating an ideological foundation for the neoliberal counter-revolution.From there, Harvey examines the practical rise of neoliberalism during the crises of the 1970s. The global stagflation, fiscal crises, and the breakdown of the Bretton Woods system provided the opening for neoliberal reforms. He details how figures such as Margaret Thatcher in Britain and Ronald Reagan in the United States aggressively pushed policies of deregulation, privatisation, union-busting, and tax cuts for the wealthy. In this narrative, neoliberalism is not presented as a natural evolution but as a deliberate political offensive by elites against working-class gains.The book then expands its focus to the international scene, showing how neoliberalism spread through global institutions such as the International Monetary Fund and the World Bank. Harvey explains how structural adjustment programmes in Latin America, Africa, and Asia imposed harsh austerity, privatisation, and market liberalisation, often under conditions of debt dependency. He argues that this was less about “development” than about securing global capital flows and subordinating national economies to neoliberal discipline.Harvey also discusses the contradictions of neoliberalism, particularly its reliance on the very state apparatus it supposedly wants to weaken. While neoliberal rhetoric celebrates free markets, in practice, governments intervene constantly to secure financial institutions, rescue corporations, and suppress social resistance. He shows how the state becomes both the guarantor of markets and the repressive force against those harmed by them, producing a form of authoritarian neoliberalism.The narrative then turns to case studies, including China’s turn to market reforms, Mexico’s NAFTA experience, and the crises of East Asia and Russia. Harvey underscores the uneven geographical development of neoliberalism, where some regions experienced explosive growth while others endured social devastation. This unevenness, he argues, is not an accident but part of neoliberalism’s logic of accumulation by dispossession, where privatisation, commodification, and financialisation expropriate public wealth and redistribute it upward.Finally, Harvey concludes by reflecting on the future of neoliberalism. He argues that despite its crises and contradictions, neoliberalism has proven remarkably resilient because it is not just an ideology but a class project backed by entrenched interests. Yet he also highlights the growth of resistance movements, from anti-globalisation protests to experiments in Latin American alternatives, suggesting that neoliberalism’s hegemony is neither inevitable nor eternal. His book closes with a call to imagine more democratic and socially just alternatives beyond the narrow confines of neoliberal rationality.The central message of David Harvey’s A Brief History of Neoliberalism is that neoliberalism must be understood less as a neutral economic philosophy and more as a political project designed to restore and consolidate the power of economic elites. Harvey argues that while neoliberalism cloaks itself in the rhetoric of freedom, efficiency, and individual responsibility, its actual practice has consistently produced widening inequality, social dispossession, and the subordination of democratic institutions to the imperatives of capital. He insists that neoliberalism is not inevitable or natural, but a deliberate class strategy, backed by states and global institutions, to reverse the gains made by labour and popular movements in the mid-twentieth century. At the same time, Harvey’s message carries a note of hope: because neoliberalism is a historically contingent project, it can be resisted and replaced by more egalitarian and democratic alternatives.To make his central argument vivid, David Harvey highlights several historical episodes where neoliberalism reshaped societies under the guise of market reform. In Britain, Margaret Thatcher used the crisis of the 1970s to dismantle the power of trade unions, privatise state industries, and impose a culture of entrepreneurial individualism. For Harvey, this was not merely economic modernisation but a deliberate assault on working-class solidarity. In the United States, Ronald Reagan pursued similar measures by cutting taxes for the wealthy, deregulating finance, and breaking organised labour, most famously in the strike against the air traffic controllers in 1981. Harvey interprets this as the restoration of elite power dressed in the language of “freedom” and “efficiency.”On the global stage, Harvey points to the role of the International Monetary Fund and the World Bank in spreading neoliberal orthodoxy. During the debt crises of the 1980s, countries in Latin America and Africa were forced to adopt structural adjustment programmes that slashed public spending, privatised essential services, and opened economies to foreign capital. These measures, presented as “development,” in fact entrenched dependency and transferred wealth to international creditors.Harvey also examines China’s market reforms after 1978, where the Communist Party adopted selective neoliberal practices to accelerate growth. While China achieved rapid industrial expansion, Harvey notes that the shift produced new inequalities and integrated China into global circuits of capital in ways that served elite accumulation. Similarly, in Mexico, the North American Free Trade Agreement (NAFTA) exposed farmers and workers to the volatility of global markets, undermining local livelihoods while benefitting multinational corporations.Through these case studies, Harvey shows that neoliberalism consistently operates as a project of “accumulation by dispossession,” stripping away collective rights, public assets, and social protections in order to consolidate wealth and power in the hands of elites. These examples reinforce his message that neoliberalism is not a neutral path of development, but a deeply political class project with global reach.Back to our topic about Socialism.
In the second chapter of Reform or Revolution?, Rosa Luxemburg confronts Bernstein’s claim that socialism could be realised through the steady accumulation of social reforms within capitalism. She argues forcefully that reforms, while beneficial for workers’ immediate conditions, do not alter the fundamental structure of the capitalist system. For Luxemburg, each reform is like a small concession wrung from the ruling class, but such concessions cannot accumulate into socialism, because they are always granted within the framework of capitalist property relations and state power.She insists that reforms have an important but limited function: they can improve the lives of workers in the short term and strengthen their capacity for struggle, but they cannot by themselves transform capitalism into socialism. Socialism, in her analysis, requires a qualitative leap—the overthrow of capitalist relations of production and the establishment of collective ownership and workers’ power. To mistake reforms for the realisation of socialism, she warns, is to confuse means with ends.Luxemburg, therefore criticises Bernstein for blurring this distinction. In her view, his optimism about reforms reflects a dangerous illusion that capitalism can evolve peacefully into socialism. She argues that this illusion not only weakens the revolutionary energy of the working class but risks binding them ever more tightly to a system that remains fundamentally exploitative. For her, reforms are tools along the road to revolution, not substitutes for revolution itself.In the third chapter of Reform or Revolution, Rosa Luxemburg directs her critique at Bernstein’s claim that capitalism could avoid collapse by gradually adapting to social reforms and new economic conditions. She argues that capitalism, by its very nature, is riddled with contradictions that cannot be smoothed out through piecemeal adjustments. The drive for profit, rooted in private ownership and competition, inevitably generates crises, unemployment, and exploitation.Luxemburg emphasises that periodic crises are not accidents or temporary disruptions but essential expressions of the capitalist mode of production. The system produces wealth and poverty simultaneously, expanding markets while also undermining them through overproduction and inequality. For her, Bernstein’s notion that capitalism could achieve stability through credit systems, cartels, or state interventions is naïve, because these mechanisms only postpone or intensify the contradictions rather than resolving them.She insists that the inevitability of crises demonstrates why socialism cannot be realised through gradual reforms. The contradictions of capitalism will always resurface, no matter how many adjustments are introduced, until the system itself is replaced. Thus, she presents revolution not as a matter of will or impatience, but as a historical necessity driven by the very logic of capitalism’s contradictions.In the fourth chapter, Luxemburg elaborates on the idea that capitalism is historically finite, and that its eventual collapse is not a speculative dream but a structural necessity. She directly challenges Bernstein’s belief that capitalism could endlessly adapt and reproduce itself, as though it were an eternal system. For Luxemburg, this denial of capitalism’s eventual breakdown was not only theoretically flawed but also politically dangerous, because it encouraged complacency and undermined the urgency of revolutionary change.She argues that capitalism, unlike earlier economic systems such as feudalism, is defined by a relentless drive for expansion into new markets. Yet this expansion is inherently limited: once global markets are saturated and the system reaches its boundaries, it cannot sustain itself. The very mechanisms that temporarily stabilise capitalism—such as credit, monopolies, or state interventions—ultimately intensify its contradictions and hasten its downfall.Luxemburg underscores that the recognition of capitalism’s eventual collapse is essential for socialist politics, because without this perspective, reforms alone appear sufficient, and the revolutionary horizon disappears. To deny collapse, in her view, is to disarm the working class and transform socialism into a moral aspiration rather than a historical necessity. Thus, for Luxemburg, the theory of capitalism’s inevitable breakdown is not about predicting an exact date, but about grounding socialism in the historical dynamics of the system itself.In the fifth chapter, Luxemburg turns her attention to the political sphere, particularly the role of democracy and political parties in the struggle for socialism. She acknowledges that democratic rights, such as freedom of speech, assembly, and participation in parliaments, are valuable instruments for the working class. Yet, she insists that these rights are not ends in themselves, but means to develop class consciousness and strengthen collective struggle.Luxemburg warns against the illusion that parliamentary reforms alone can deliver socialism. For her, parliaments in capitalist societies remain structurally bound to the interests of the ruling class, no matter how many progressive reforms are achieved. The working class may win concessions, but as long as the economic foundation of capitalism remains intact, the state and its institutions cannot be neutral arbiters—they are instruments of class rule.She stresses the importance of the workers’ movement building its own independent political organisation, not merely to seek reforms but to prepare for the transformation of society. This is where she parts ways with Bernstein: for him, reforms were the path to socialism; for her, reforms were the terrain on which the working class learned to fight, but the ultimate horizon remained revolution. Thus, democracy and reform were necessary, but only insofar as they were subordinated to the broader revolutionary project.In the final chapter, Luxemburg draws her arguments to a decisive conclusion. She reiterates that social reforms, while valuable, cannot substitute for the revolutionary transformation of society. Reforms can improve the conditions of the working class in the short term, but they do not alter the fundamental structures of capitalist exploitation. To equate reforms with socialism, as Bernstein suggested, is to abandon the very essence of Marxism and to reduce socialism to a well-intentioned liberal project.Luxemburg asserts that the working class must not lose sight of its historical mission: to overthrow capitalism and build a new social order. She reminds her readers that every gain achieved through reform remains precarious under capitalism and can easily be rolled back during crises or by political reaction. Only revolution offers a lasting resolution by abolishing the root causes of exploitation and inequality.Her conclusion is not a romantic call for immediate insurrection but a principled insistence that socialism is not about a gradual drift toward fairness, but about a decisive break with the old order. For Luxemburg, to choose between reform and revolution is a false dilemma: reforms are necessary, but only revolution gives them permanent meaning. Thus, she ends by affirming that revolutionary struggle is the very heartbeat of socialism, without which the movement loses both its direction and its soul.For Rosa Luxemburg, the word “reform” referred to the series of gradual improvements won by the working class within the framework of capitalism. These included social legislation, parliamentary gains, higher wages, shorter working hours, and other measures that alleviated the hardships of exploitation. She valued reforms as real achievements that could strengthen workers’ organisation and confidence. However, she was adamant that reforms do not change the underlying structure of capitalism; they merely adjust its surface. To treat reforms as the path to socialism, as Bernstein did, was to confuse means with ends.By contrast, “revolution” for Luxemburg did not mean spontaneous chaos or a romanticised uprising. It meant a fundamental transformation of the economic and political order, in which capitalism itself is abolished and replaced with socialism. Revolution, in her view, was the culmination of class struggle, driven by the contradictions within capitalism that inevitably lead to crises and breakdowns. It was not an optional shortcut, but the necessary conclusion of historical development.Thus, Luxemburg drew a sharp distinction: reform was the method of struggle, the terrain where workers gain experience and strength, while revolution was the ultimate goal that gave those struggles meaning. Without revolution, reforms would be temporary, reversible, and ultimately powerless against the structural domination of capital. Without reforms, revolution would lack the organisation and consciousness needed to succeed. For her, both were interconnected, but only revolution defined the essence of socialism.If Bernstein’s revisionism had triumphed in the early twentieth century, socialism in Europe would likely have evolved into a steady path of parliamentary reform, trade union growth, and welfare state development. His vision suggested that workers could achieve emancipation not by overthrowing the state, but by capturing it through elections and transforming it step by step. In such a world, the socialist movement would have resembled what later became European social democracy: gradual reforms, stronger labour protections, and state intervention to mitigate capitalism’s excesses. The downside, however, would have been the dilution of socialism’s revolutionary spirit, and the risk that the working class might grow complacent within a softened but enduring capitalist framework.If Luxemburg’s revolutionary strategy had prevailed, socialism in Europe would have remained a mass movement committed to direct action and the overthrow of capitalism. Her insistence on revolution as the only true solution would have kept the movement radical, uncompromising, and perhaps more inspiring to the oppressed masses. Yet this path carried grave dangers: it risked isolating the movement from parliamentary opportunities, provoking violent repression, and leading to instability or authoritarian outcomes. In the volatile atmosphere of the early twentieth century—with wars, empires collapsing, and fragile democracies—Luxemburg’s route might have unleashed both revolutionary possibilities and catastrophic failures.Imagine Europe in the year 1910, standing at a crossroads. If Bernstein’s road had been taken, the continent would have witnessed socialist parties steadily winning seats in parliaments, workers negotiating better conditions through powerful trade unions, and governments gradually introducing social insurance, unemployment benefits, and public healthcare. The red flag would still fly, but it would be draped over legislative halls rather than revolutionary barricades. By the 1920s, perhaps Germany, Britain, and France would already have resembled the postwar welfare states that in reality only came decades later. Capitalism would not have been destroyed, but it would have been reshaped, softened, and made to serve the people more than its own profit logic.Now imagine if Luxemburg’s path had prevailed. Instead of steady reforms, the cities of Europe might have erupted into waves of strikes, general shutdowns, and mass uprisings. Berlin, Paris, and Vienna could have looked like Petrograd in 1917, filled with revolutionary councils and workers’ militias. The old monarchies might have collapsed even faster, and socialist republics could have spread across the continent. Yet the risks would have been immense: civil wars, counter-revolutions, and foreign interventions might have shattered Europe into chaos. The revolutionary spirit would have burned brightly, but perhaps too brightly, consuming both its enemies and itself.In truth, Europe chose neither path completely. Bernstein’s vision came alive after 1945 in the creation of welfare states, while Luxemburg’s revolutionary dream flickered in moments of upheaval but was crushed by violence. The crossroads of 1910 reminds us that the future of socialism was never a fixed script, but a series of choices, each with its promises and perils.The contrast between Bernstein and Luxemburg can be seen in today’s social movements, such as the struggle against climate change. A Bernstein-style approach would emphasise gradual reforms through parliamentary channels, pushing for carbon taxes, green subsidies, and international agreements. The logic is that by working within the system, activists can steadily reshape capitalism into a more sustainable form, avoiding confrontation while achieving tangible results.A Luxemburg-style strategy, on the other hand, would insist that capitalism itself is the root cause of ecological destruction and cannot be reformed. From this perspective, only radical disruption—mass strikes, systemic shutdowns, or even revolutionary transformation—could address the crisis at its core. Incremental reforms, Luxemburg’s modern heirs would argue, merely delay catastrophe while leaving the system intact.The same tension appears in movements for workers’ rights in the digital economy. A Bernsteinian approach favours legal protections for gig workers, collective bargaining rights, and social insurance schemes adapted to new forms of labour. A Luxemburgian approach would argue that such reforms cannot tame the exploitative logic of platforms and that only collective action to dismantle or radically reorganise the tech economy could secure true justice.In both cases, the choice echoes the century-old debate: reformist pragmatism versus revolutionary ambition. Bernstein’s voice whispers that the system can be bent to our will if we are patient; Luxemburg’s voice shouts that only breaking it can set us free.The clash between Bernstein and Luxemburg, therefore, symbolised more than a disagreement about theory. It was a choice between two roads: one of cautious integration into the system, and one of uncompromising rupture. In reality, much of European socialism after 1945 followed Bernstein’s path, building welfare states and parliamentary democracies, while Luxemburg’s revolutionary dream remained an inspiring but tragic counterpoint, especially after her assassination in 1919. The debate still resonates today, whenever the left must choose between reformist pragmatism and revolutionary ambition.
[Part 6]
