By Peter Gorski
Grace Blakeley’s Stolen: How To Save The World From Financialization (2019) is required reading for anyone seeking to understand neoliberal ideology.
Neoliberal is a term thrown around often these days, and it suffers from serious definition wobble. What exactly is neoliberalism? How does it differ from traditional liberal ideology? Blakeley redefines the neoliberal era as the political project of financialization, and she traces its history from the late 20th century to the present day.
Blakeley begins with the history of the United Kingdom and the United States, starting with a brief overview of the social democratic postwar era. We then focus on new conservative leaders who capitalized on the stagflation crisis of the 70s to deregulate private industry, banks, and financial institutions, to shrink the state, to privatize everything, and to saddle working people with debt. Particular attention is given to housing, which was deftly used by conservative leaders to split segments of the working class off and pull them toward conservative parties, and how subpar mortgages, together with dubious financial schemes, ultimately led to the financial crisis of 2007-08.
Blakeley argues the last 40 years has been a project chiefly driven by the process of financialization, starting with deregulation of finance and banking, and leading to private businesses, individual households, and our governments themselves in effect becoming “financial institutions.” This realignment was driven by relentless profit seeking, and the subjugation of business to shareholder profits over production and investment. Today, as a result, our productive economy is stalling, and infrastructure is falling apart after decades of neglect.
This financialization was coupled with an explosion of personal household debt, as wealth was transferred from the wages of working people to the pockets of those holding capital. To keep the consumer economy moving, credit was extended further and further to households with no hope of paying these debts back. The economic changes that grew from this process have stunted the power of labor — splintering working people on both individual and community levels and consolidating power further into the hands of the super-rich.
The book is about 250 pages, and provides a great overview of the financialized economy and how it led to the late 2000’s market crash, but it doesn’t get bogged down in the minutiae of what can be a complicated subject. I recommend it to those seeking to understand how our economy was designed to create inequality and how that design has produced immense instability and societal breakdown. The book illustrates how the new system built on the corpse of the social democratic models it followed was unstable from the start, and could only lead to the crash we saw in 2007-08.
In Stolen’s final chapter, Blakeley suggests what we can do about these problems in the years ahead. She lays out many viable solutions but emphasizes that no changes will be achieved without large-scale political will.
We have never really recovered from the crashes that rocked the late 2000s, and the neoliberal model still has no legitimacy. We have seen challenges from both left and right topple the old order across the globe. The staples of privatization, deregulation, and austerity have bled our economies dry. We cannot financialize our way out of our ongoing problems. As we continue on in the unstable, frightening present, we still have an opportunity to change our social systems for the better. Hopefully working people can band together to fight for a future with common decency, support, and prosperity for all, not just the wealthy.
Help the La Crosse Independent grow by becoming a subscriber for just $5.75 a month here.