Se e ield, Ma k
Wo king Pape
Managing he discon en o he lose s edux: A u u e o
au ho i a ian neolibe alism o social capi alism?
FMM Wo king Pape , No. 98
P o ided in Coope a ion wi h:
Mac oeconomic Policy Ins i u e (IMK) a he Hans Boeckle Founda ion
Sugges ed Ci a ion: Se e ield, Ma k (2024) : Managing he discon en o he lose s edux: A u u e
o au ho i a ian neolibe alism o social capi alism?, FMM Wo king Pape , No. 98, Hans-Böckle -
S i ung, Mac oeconomic Policy Ins i u e (IMK), Fo um o Mac oeconomics and Mac oeconomic
Policies (FMM), Düsseldo
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FMM WORKING PAPER
No. 98 • Janua y 2024 • Hans-Böckle -S i ung
M
ANAGING THE DISCONTENT OF
THE
LOSERS REDUX: A FUTURE OF
AUTHORITARIAN
NEOLIBERALISM
OR
SOCIAL CAPITALISM?
Ma k Se e ield
1
ABSTRACT
Neolibe alism e isce a ed he alue-sha ing e hos o he pos -wa Golden Age (1945-73),
seeking o main ain social cohesion in ci il socie y by 'managing he discon en o he lose s'.
This in ol ed econciling wo king households o he eali ies o he neolibe al labou ma ke
by means o coe cion, dis ac ion, and deb accumula ion - he la e se ing o limi he
g ow h o consump ion inequali y in he ace o bu geoning income inequali y. The global
inancial c isis (GFC) and G ea Recession unde mined he p ocess o household deb
accumula ion, c ea ing a c isis o neolibe al accumula ion. Key o he ins i u ional enewal
equi ed o add ess his c isis will be managing he discon en o he lose s inhe i ed om he
neolibe al e a. One possibili y is Au ho i a ian Neolibe alism, based on inc easingly illibe al
ampli ica ion o he 'coe ce and dis ac ' elemen s inhe i ed om he Neolibe al Boom (1990-
2007). The only iable al e na i e is Social Capi alism. This in ol es a enewal o social
democ acy ha manages he discon en o he lose s a i s sou ce, by c ea ing inclusi e and
sus ainable g ow h ha bo h educes he need and desi e o illibe alism in he sphe e o ci il
socie y.
—————————
1 Depa men o Economics, New School o Social Resea ch, USA; FMM ellow.
ma k.se e [email protected]
Managing he Discon en o he Lose s Redux: A Fu u e
o Au ho i a ian Neolibe alism o Social Capi alism?
Ma k Se e ield
*
Janua y 8, 2024
Abs ac
Neolibe alism e isce a ed he alue-sha ing e hos o he pos -wa Golden Age (1945-
73), seeking o main ain social cohesion in ci il socie y by ‘managing he discon en
o he lose s’. This in ol ed econciling wo king households o he eali ies o he ne-
olibe al labou ma ke by means o coe cion, dis ac ion, and deb accumula ion – he
la e se ing o limi he g ow h o consump ion inequali y in he ace o bu geoning
income inequali y. The global inancial c isis (GFC) and G ea Recession unde mined
he p ocess o household deb accumula ion, c ea ing a c isis o neolibe al accumula-
ion. Key o he ins i u ional enewal equi ed o add ess his c isis will be managing
he discon en o he lose s inhe i ed om he neolibe al e a. One possibili y is Au-
ho i a ian Neolibe alism, based on inc easingly illibe al ampli ica ion o he ‘coe ce
and dis ac ’ elemen s inhe i ed om he Neolibe al Boom (1990-2007). The only i-
able al e na i e is Social Capi alism. This in ol es a enewal o social democ acy ha
manages he discon en o he lose s a i s sou ce, by c ea ing inclusi e and sus ainable
g ow h ha bo h educes he need and desi e o illibe alism in he sphe e o ci il
socie y.
JEL codes: E21, B51, B52, P16
Keywo ds: Social s uc u e o accumula ion, capi al-ci izen acco d, household deb ,
inequali y, populism
*
P o esso o Economics, New School o Social Resea ch; email ma k.se e [email protected]. I would
like o hank he Open Socie y Founda ion and Hewle Founda ion g an s Beyond Neolibe alism and Neo-
Illibe alism o unding ha helped o suppo his esea ch. An ea lie e sion o he pape was p esen ed
a he con e ence Beyond Neolibe alism and Neo-Illibe alism: The Democ a ic Challenge and he Fu u e o
Capi alism, The New School Fo Social Resea ch, New Yo k, No embe 6, 2023. I would like o hank
con e ence pa icipan s o hei help ul commen s. Any emaining e o s a e my own.
1
“Ou li es a e sho ening, ou wellbeing is alling, ou secu i y being disman led.
These a e he condi ions o despai , and a bi e ha es beckons”
Owen Jones, The Gua dian, Wednesday Ap il 5, 2023.
“Loss some imes cu dles in o u y and ha e o denial and delusion”
Je Sha le , The Unde ow: Scenes om a Slow Ci il Wa , W.W. No on, 2023
“You ha e o see somebody su e o he han you sel ”
The Icicle Wo ks, Up He e in he No h o England, Si ua ion Two, 1986
1. In oduc ion
This pape d aws on social s uc u e o accumula ion heo y (SSAT) o cha ac e ize he
Neolibe al Boom (1990-2007) in he US economy as an ins i u ionally-dis inc ‘s age o cap-
i alism’ ha , since he global inancial c isis (GFC) and G ea Recession o 2007-09, has
en e ed a phase o c isis ha equi es ins i u ional enewal.1I is a gued ha whe eas he
pos -wa Golden Age (1945-73) was based on a social con ac ha balanced he in e es s
o capi al wi h hose o wo ke s (a he poin o p oduc ion) and pa icipa o y democ acy
(in he sphe e o ci il socie y), neolibe alism e isce a ed he alue-sha ing ‘capi al-labou
acco d’ a he poin o p oduc ion and sough social cohesion in ci il socie y h ough a p o-
cess o ‘managing he discon en o he lose s’. This in ol ed econciling wo king households
o he eali ies o he neolibe al labou ma ke by means o coe cion, dis ac ion, and deb
accumula ion – he la e se ing o limi he g ow h o consump ion inequali y in he ace
o bu geoning income inequali y.
Howe e , he p ocess o household deb accumula ion was unde mined by he GFC and
G ea Recession. Key o he ins i u ional enewal equi ed o add ess his c isis is managing
1The e m ‘social s uc u e o accumula ion’ is used he e as a po man eau e m o cap u e wha , in o he
(companion) li e a u es, is e e ed o as a ‘mode o egula ion’ (Boye , 1990) o ‘ins i u ional amewo k’
(Co nwall, 1990). I e e s o a cons ella ion o ins i u ions ha amelio a e he con lic and unce ain y
endemic o capi alism by media ing ce ain key economic ac i i ies and ela ionships and in so doing, c ea ing
condi ions conduci e o success ul mac oeconomic pe o mance.
The ocus in wha ollows is he US economy, bu e e ences will also be made o neolibe alism in o he
ad anced capi alis economies.
2
he discon en o he lose s inhe i ed om he neolibe al e a. One possibili y is Au ho i a ian
Neolibe alism, which ampli ies he ‘coe ce and dis ac ’ elemen s o he p eceding egime.
A p esen , mains eam cen e -le pa ies seek o oppose his possibili y by emphasizing
i s illibe alism. Bu e-asse ing libe al alues – while inna ely aluable – does no manage
he discon en o he lose s, and is he e o e doomed o ail. The only iable al e na i e o
Au ho i a ian Neolibe alism is Social Capi alism: a enewal o social democ acy ha allies
capi alis o ces o p oduc ion o social ela ions o p oduc ion designed o os e inclusi e
and sus ainable g ow h. Social Capi alism manages he discon en o he lose s a i s sou ce,
by al e ing he balance o powe in bo h he labou ma ke and ci il socie y. By hus c ea ing
a ‘ ide ha li s all boa s’ in he economic sphe e, i educes bo h he need and desi e o
illibe alism in he social sphe e, and so p o ides a basis o enewing libe al democ acy.
The emainde o he pape is o ganized as ollows. Sec ion 2 ou lines he neolibe al
capi al-ci izen acco d as o iginally en isaged by Hous on (1992), and he c i ique o his
ision due o Se e ield (2020). Sec ion 3 desc ibes he cu en c isis o his acco d. Al e -
na i e app oaches o ins i u ional enewal in con empo a y capi alism a e hen explo ed in
sec ion 4. Au ho i a ian Neolibe alism is desc ibed as a p ojec ha seeks o enew neolib-
e alism by inally ins i u ing he so o coe ci e and di isi e capi al-ci izen acco d o iginally
en isaged by Hous on (1992). Social Capi alism, meanwhile, is p esen ed as a cohe en and
poli ically iable p ojec ha seeks o anscend neolibe alism, simul aneously emb acing
social democ acy in he economic sphe e (so as o elimina e he discon en o he lose s) and
libe al democ acy in he social sphe e. The inal sec ion o he pape o e s some conclusions.
2. The neolibe al capi al-ci izen acco d
A capi al-ci izen acco d is “a se o no ms and con en ions ha c ea e social cohesion by ame-
lio a ing po en ial con lic be ween capi al (which is o ganized a ound a command s uc u e
3
based on owne ship and manage ial con ol) and he ci izen y, who expec o be in ol ed in
sel -go e nance h ough mechanisms o pa icipa o y democ acy” (Se e ield, 2020, pp.77-
8). Acco ding o Hous on (1992, pp.62-4), he neolibe al capi al ci izen acco d ook a e y
pa icula o m ha in ol ed ‘managing he discon en o he lose s’, in di ec esponse o
he p opensi y o neolibe alism, as a s age o capi alism, o c ea e economic winne s and
lose s. Pa o his p ocess was explici ly coe ci e, he bes example being he mass inca -
ce a ion o young, and especially black, males in he US. Acco ding o he Wo ld P ison
B ie published by he Ins i u e o C iminal Policy Resea ch (www.p isons udies.o g), he
a e o inca ce a ion in he US is among he highes in he wo ld: 655 inma es pe 100,000
esiden s in 2016, as compa ed wi h a wo ld a e age o 172 inma es pe 100,000 esiden s,
and 80-140 inma es pe 100,000 esiden s in la ge Eu opean coun ies and Canada. Mo e-
o e , inca ce a ion is disp opo iona ely he a e o back males. Hence acco ding o Pe i
and Wes e n (2004), among hose bo n be ween 1965 and 1969, 20 pe cen o black men had
se ed ime in p ison by hei ea ly hi ies as compa ed wi h jus 3 pe cen o whi e men,
he a e o inca ce a ion o black men in he s udy ising o 30 pe cen o hose wi hou
college educa ion and almos 60 pe cen o hose who ailed o comple e high school.
A second aspec o managing he discon en o he lose s in ol es consensus-building, bu
on he basis o di isi e social issues ha , by hei na u e, complemen he coe ci e elemen o
he neolibe al capi al-ci izen acco d and ac as a sou ce o non-economic dis ac ion. This is
exempli ied by escala ing social poli ics ha e- ocus a en ion away om he economy and
owa ds issues such as gun owne ship, na ionalism, eligion, and acial and/o e hnic iden i y.
This is no o say ha issues such as gun owne ship o acial iden i y a e no impo an issues
in hei own igh , bu ha inc easing emphasis on such issues, coinciden wi h simul aneous
ailu e o admi and add ess p essing economic p oblems a lic ing he majo i y o wo king
households, has been an impo an ea u e o neolibe alism. In his way, hese issues se e
an ins umen al ole as non-pecunia y ‘o se s’ o he disad an ageous ma e ial eali ies o
4
neolibe al labou ma ke s, gi ing hem a hegemonic ole in he p ocess o managing he
discon en o he lose s ha in ol es he p o ision o ‘less b ead and a lo mo e ci cus’
Se e ield (2020, p.82).
In sho , and acco ding o Hous on (1992), managing he discon en o he lose s in ol es
econciling he ou comes bo ne o neolibe al labou ma ke s (low wage g ow h, e-asse ion
o capi alis con ol o he wo kplace, and heigh ened employmen insecu i y) wi h con in-
ued ac i e consen o capi alism (and hence social s abili y), by means o bo h explici
coe cion and ‘di isi e consensus building’ ocused on sou ces o non-economic dis ac ion.
Bu acco ding o Se e ield (2020), his accoun o he neolibe al capi al-ci izen acco d is
incomple e, because he la e also es ed (in pa ) on a hidden ma e ial basis. Hence while
he neolibe al capi al-ci izen acco d had bo h coe ci e and consensual dimensions pe Hous-
on (1992), he consensual dimension i sel had bo h ideological and ma e ial bases. A key
componen o he la e was he abili y o households o accumula e deb o limi he g ow h
o consump ion inequali y, despi e hei expe ience o bu geoning income inequali y. Hence
a well-es ablished heme in he e odox mac oeconomics is ha household deb accumula ion
enabled he g ow h o consump ion spending o exceed household income g ow h du ing he
1990-2007 Neolibe al Boom (Palley, 2002; Cynamon and Fazza i, 2008; B own, 2008; Ba ba
and Pi e i, 2009). In e ec , aided and abe ed by ising house p ices and he changed e-
la ionship be ween households and inancial ma ke s (on which see, o example, Cynamon
and Fazza i, 2008; S ockhamme and Wildaue , 2018), wo king- and middle-class house-
holds bo owed in o de o o se he nega i e consequences o hei consump ion spending
o he s uc u al s agna ion o hei eal (wage) incomes. The con ibu ion o his beha io
o demand- o ma ion and hence economic g ow h is he adi ional ocus o he li e a u e
jus ci ed: in he absence o household deb accumula ion (and hinking along adi ional
Keynesian lines), he secula edis ibu ion o income away om high-spending, less a luen
households owa ds lowe -spending, mo e a luen households would ha e caused demand-
5
o ma ion and hence g ow h o a ophy. Bu acco ding o Se e ield (2020), household
bo owing had a second e ec . I p o ided wo king- and middle-class Ame ican households
wi h ( empo a y) e uge om he ull ma e ial consequences o he end owa ds inc easing
income inequali y. In so doing, household deb accumula ion made an impo an con ibu-
ion o social cohesion. By holding a bay he e ec s o neolibe alism on inal consump ion
ou comes, i kep ali e belie in he ‘Ame ican D eam’.
3. The neolibe al capi al-ci izen acco d in c isis
Gi en he ole a ibu ed o household bo owing in he p eceding sec ion, i ollows ha one
o he e ec s o he 2007-09 GFC and G ea Recession was o ac u e he ma e ial basis o
he neolibe al capi al-ci izen acco d. As is well known, since he GFC and G ea Recession,
US households ha e dele e aged and, as a esul o his, he consump ion o income a io
in he US – which ose du ing he Neolibe al Boom as a esul o household bo owing –
en e ed a phase o secula decline (Cynamon and Fazza i, 2016; Ko z, 2019).
This is bo ne ou in Figu e 1, which illus a es bo h he deb o disposable income and
consump ion expendi u es o disposable income a ios in he US economy du ing he neolib-
e al e a. The pa e n o ise and decline in he deb o disposable income a io ei he side
o he 2007-09 he GFC and G ea Recession e iden in Figu e 1a is mi o ed by he same
pa e n in Figu e 1b.2The co-mo emen o he a ios in Figu e 1 is consis en wi h he idea
ha igh e bo owing cons ain s and household dele e aging in he wake o he G ea Re-
cession ha e weakened he capaci y o less a luen households o p o ec consump ion om
he ad e se e ec s o eal income s agna ion. Reduc ions in household bo owing among less
a luen households since he onse o he GFC and G ea Recession ha e esul ed in s ag-
2As no ed by Cynamon and Fazza i (2016), he beha io o he consump ion expendi u es o disposable
income a io is d i en by he beha io o he bo om 95% o households in he size dis ibu ion o income.
The a io o he op 5% luc ua es coun e -cyclically abou a cons an alue consis en wi h consump ion
smoo hing beha io .
6
nan eal incomes inally exe ing hei p e iously-la en e ec s on consump ion spending.
This, in u n, has exposed wo king- and middle-class households mo e ully o he ma e ial
dis ess associa ed wi h he s agna ion o hei wage incomes, a ising om he wo kings
o he neolibe al labou ma ke . By hus unde mining he ma e ial basis o he neolibe al
capi al-ci izen acco d, he social cohesion associa ed wi h his acco d p io o 2007-2009 has
been e oded.
Bu as he ma e ial basis o he capi al-ci izen acco d has wi he ed, so i s ideological
basis (along wi h he coe ci e dimension o he acco d) has been ampli ied. In e ospec , i
appea s ha he o iginal ision o he capi al-ci izen acco d ou lined by Hous on (1992) was
no so much w ong as ahead o i s ime: he capi al-ci izen acco d has come o bea close
esemblance o i s desc ip ion in Hous on (1992) in he pe iod since 2009. This is pa icu-
la ly e iden in he an i-communi a ian ben o he mechanisms o non-economic dis ac ion
desc ibed by Hous on (1992, p.63), which he unde s ood o in ol e he celeb a ion o c ude
sel -in e es coupled wi h ole ance o ic imiza ion and exclusion – especially acism. As
ega ds he la e , Hous on (1992, p.63) d ew a en ion o inc easing a acks on a i ma i e
ac ion and he public p ominence o Da id Duke.3I is now easy o ecognize he p escience
o his hinking gi en he inc eased p ominence o an i-communi a ian sen imen since 2015
and he ad en o he T ump e a, du ing which ime enewed ole ance o acism has been
joined by encou agemen o o he s ands o ic imiza ion and exclusion such as a acks on
he LGBTQ+ communi y and abo ion igh s. Such di isi e consensus building has gone
hand-in-hand wi h mo e explici ly coe ci e beha iou . Hence nume ous US s a es ha e leg-
isla ed abo ion bans since he US Sup eme Cou ’s 2022 Dobbs decision, e oding women’s
igh s o make decisions abou hei own bodies and in some cases denying hem access o
basic heal hca e. Meanwhile, s a e legisla ion in Flo ida has baaned gende -a i ming ca e o
3Da id Duke is a a - igh Ame ican poli ician and o me g and wiza d o he Ku Klux Klan who is bes
known o his acism and an i-Semi ism.
7
eso (ELR) p oposals whe ein, in addi ion o p i a e- and public-sec o employmen , he
go e nmen aims o p o ide meaning ul employmen in lieu o unemploymen bene i s (Tch-
e ne a. and W ay, 2005).10 This is aimed p ima ily a hose wo king in he p i a e sec o ,
whe e business cycles c ea e pe iodic high unemploymen . The gene al aim o ELR schemes
is o help wo ke s o a oid he mani old social and economic p oblems associa ed wi h un-
employmen bu wi hou subjec ing hem o ‘wo k a e’ – ha is, puni i e unemploymen
insu ance sys ems ha manda e wo k (howe e meaningless) in e u n o bene i s. Em-
ploymen main enance is also he pu pose o sho - ime wo k schemes, such as he Ge man
sys em o ku za bei – a social insu ance p og am ha enables employe s o educe wo king
hou s ins ead o laying o wo ke s. In he e en o a ecession, a sho - ime wo k scheme bo h
cushions household income loss and minimizes wo ke - i m sepa a ions. The la e wo ks o
he po en ial ad an age o bo h wo ke s and i ms when gene al economic condi ions im-
p o e, acili a ing expansions o ou pu h ough inc eases in he hou s o cu en sho - ime
employees a he han h ough cos ly sea ch o new employees.
Finally, labou -ma ke -cen ic policies o he ype en isaged abo e mus be bu essed by
a enewal o he wel a e s a e. P opaga ion o an i-wel a is sen imen is pa o he o iginal
neolibe al capi al-ci izen acco d desc ibed by Hous on (1992). An impo an componen
o Social Capi alism in ol es bo h: (a) coun e ing he o ic designed o mis ep esen he
wel a e s a e, as no hing mo e han a collec ion o disincen i es o wo k ha ad an age only
a mino i y o idle s; and (b) e i alizing public p o ision o and access o i al social se ices
– such as heal h ca e, educa ion, and child ca e – ha , in ac , make he wel a e s a e a
collec ion o i ally impo an ‘ladde s’ o economic p ospe i y and upwa d social mobili y.11
Social Capi alism so-desc ibed bea s compa ison o he concep o ‘social democ a ic
10Depending on he p ecise p oposal, an ELR p og am may p o ide an al e na i e o unemploymen
bene i s o else eplace unemploymen bene i s en i ely.
11The e would be g ea bene i o many cu en ly disad an aged membe s o socie y i mo e o hose
who a e cu en ly in posi ions o ad an age we e less sel -celeb a o y and mo e o h igh abou he o en
subs an ial public in es men s ha ha e con ibu ed o hei ad ancemen .
14
libe alism’ ecen ly ad anced by Hodgson (2021), wi h espec o bo h he o ganiza ion o he
economy and he o ganiza ion o ci il socie y. Wi h espec o he o me (and as is implici
in wha has been said so a ), Social Capi alism en isages con inued eliance on co e capi alis
ins i u ions such as p i a e p ope y and ma ke s, enhanced by s a e in e en ion designed
o supplemen and guide he wo kings o hese ins i u ions in he pu sui o he common
good. In sho , he guiding ision o Social Capi alism is ha capi alis o ces o p oduc ion
should be – indeed, need o be – embedded in a sui able social s uc u e (i.e., ela ions o
p oduc ion) in o de o make capi alism ‘social’ in he sense ha , in he i s ins ance, i
p o ides ma e ial p ospe i y and secu i y o all. As ega ds ci il socie y, meanwhile, Social
Capi alism es s on he p imacy o ep esen a i e democ acy coupled wi h he p o ec ion o
indi idual igh s, bu wi hou assuming ha indi iduals a e (o should be) de o ed only o
hei own sel in e es . He e he inspi a ion is he ‘mo al sen imen s’ desc ibed by Adam
Smi h, ha pu he pu sui o economic sel -in e es in o a b oade social con ex based on
espec o he igh s o o he s, a sense o du y o collec i e causes, and acknowledgmen
o he impo ance o coope a ion and coo dina ion wi h o he indi iduals and communi ies.
This is a ci il socie y in which libe y is seen no as a ‘nega i e’ concep (in ol ing only he
absence o cons ain s on indi idual beha iou ), bu as a ‘posi i e’ concep – a socie y in
which, o example, a o mal law equi ing d i e s o ‘keep igh excep o pass’ is unde s ood
as libe a ing, because by denying he choice o d i e anywhe e on he oad i coo dina es
many indi idual decisions and, in so doing, acili a es oad anspo ion in a manne and o
an ex en ha would o he wise be impossible.
As no ed, he na ow de ini ions o inclusi i y and sus ainabili y i emb aces mean ha
he concep o Social Capi alism ou lined he e is no a panacea. Bu o he ex en ha i
add esses he neolibe al deg ada ion o labou ma ke condi ions – which is a guably he
‘g ound ze o’ o mac oeconomic and social mal unc ion unde neolibe alism – i cons i u es
no jus a alid bu a guably essen ial poin o depa u e o any mo e expansi e and gen-
15
uinely pos -neolibe al p ojec .
4.2. Managing o elimina ing he discon en o he lose s?
An impo an p emise o his pape is he necessi y o main aining social cohesion in a
capi alis economy i i is o unc ion success ully. This aises he ques ion as o how di e en
possible u u e poli ical-economic egimes would app oach his ask, and whe he o no hey
would succeed?
In o de o add ess his ques ion, i is use ul o i s e e o igu e 3, which summa izes
he essen ial isions o he economy and poli y embodied in Au ho i a ian Neolibe alism,
Mode n Cen e-Le poli ics, and Social Capi alism. The e e ences o ‘social democ a ic
co po a is ’ and ‘bou geois co po a is ’ isions o he economy in igu e 3 d aw on Co nwall
(1990), who a gued ha an in e en ionis s a e in a mixed economy can in e ene and
di ec he economy ei he mo e in he in e es s o wo ke s (as in classic Scandina ian social
democ acy) o mo e in he in e es s o capi al (as in con empo a y economies such as Japan
and Swi ze land o , in he ex eme, in he poli ical economy o ascism). Au ho i a ian
Neolibe alism appea s in he no h-wes quad an o igu e 3. I is bou geois co po a is in
he s aigh o wa d sense ha i inhe i s he economic s uc u e o neolibe alism, in which
he powe o he s a e is used (on behal o p i a e weal h) o disempowe wo ke s. I is
au ho i a ian in he sense ha , as desc ibed in sec ion 3, i seeks o s uc u e ci il socie y by
ampli ying wha emains o he neolibe al capi al-ci izen acco d – i s coe ci e and di isi e
consensus building aspec s. Pu ing hese ai s oge he , i ollows ha Au ho i a ian
Neolibe alism will need o manage he discon en o he lose s, and ha i will do so (and so
achie e social cohesion o a so ) as p e iously desc ibed in sec ion 3: by ully (and inally)
ins i u ing he o iginal ‘less b ead and a lo mo e ci cus’ ision o he capi al-ci izen acco d
ound in Hous on (1992).
Meanwhile he pa ies o he Mode n Cen e-Le appea in he no h-eas quad an o
16
Figu e 3: Al e na i e Fu u e Capi alisms
Au ho i a ian
Neolibe alism
Bou geois
Co po a is
Social
Democ a ic
Co po a is
ECONOMY
Au ho i a ian
Libe al
Democ a ic
POLITY
Mode n
Cen e-Le
Social
Capi alism
igu e 3. The Mode n Cen e-Le unequi ocally ad oca es libe alism a he han illibe alism
in he social sphe e, and in he con empo a y poli ical en i onmen is hus seen by many
as i uously de ending democ acy agains would-be demagogues and dic a o s. I does so,
howe e , wi h an app oach o he economy ha is bou geois co po a is . In he economic
sphe e, he Mode n Cen e-Le o e s li le mo e han ‘so ’ Tha che ism: wa m-hea ed
he o ic designed o suga -coa he s a e’s commi men o he in e es s o capi al (p i a i-
za ion, ee ade, lax an i- us en o cemen , wel a e ‘ e o m’) ega dless o he consequences
o wo ke s.12 The esul o all his is ha he Mode n Cen e-Le emb aces neolibe alism
bu p o ides i sel wi h no basis o managing he discon en o he lose s. I does no
manage his discon en a i s sou ce (by i ue o i s bou geois co po a ism) and nei he
does i do so in he social sphe e, whe e i ac i ely esis s he illibe al di isi e consensus
12This app oach has been he hallma k o a ious ecen adminis a ions in he US and UK, o example,
( hose o Bill Clin on, Tony Blai , and Ba ack Obama) and p omises o esu ace in he UK unde Kie
S a me . I can be a gued ha he Biden adminis a ion in he US is, i no a ull-blown excep ion, hen
a leas an e o o pull away om he neolibe al co e o Mode n Cen e-Le hinking. Once again he
eade is e e ed o Mudge (2008, pp.721-2), Ko z (2015, chp .4), and Lich ens ein and S ein (2023) on he
complici y o he le in ad ancing he cause o neolibe alism.
17
building and coe cion cen al o he machina ions o ‘less b ead and a lo mo e ci cus’. As
a esul , i o e s no basis o enewing he capi al-ci izen acco d and canno c ea e social
cohesion. Ins ead, i s (in insically wo hy) e o s wi h espec o he de ense o democ acy
a e equen ly dismissed as he p eoccupa ion o ma e ially com o able and ‘ou o ouch’
eli es.
Finally, Social Capi alism appea s in he sou h-eas quad an o igu e 3. I s ision o
ci il socie y es s on a commi men o democ acy embedded in a posi i e iew o libe y. I s
economic co e is, in he social democ a ic co po a is adi ion, o ien ed owa ds empe ing
he powe o weal h and so di ec ing capi alis o ces o p oduc ion owa ds inclusi e and
sus ainable g ow h. In his way, i ‘manages’ he discon en o he lose s by elimina ing his
discon en a i s (economic) sou ce. This, in u n, libe a es Social Capi alism o pu sue i s
ision o ci il socie y. I is ee o esis illibe alism (because i does no need ‘a lo mo e
ci cus’ o dis ac a en ion om he e being ‘less b ead’), and ins ead achie e enewal o
he capi al-ci izen acco d (and social cohesion) h ough p omo ion o he ene s o libe al
democ acy.
4.3. Can he economy eally make a di e ence?
The a gumen made abo e places conside able weigh on he economy (and mo e speci ically,
inclusi e and sus ainable g ow h) as he ulc um o Social Capi alism ha simul aneously
sa es capi alism and libe al democ acy. Can he economy eally be his impo an ? A guably
i can.
Fi s , S o m (2021) a gues ha he undamen al ailing o la e- wen ie h cen u y ‘social
democ acy’ was i s sha p u n away om i s o me ly e o mis economic basis unde he
guise o ‘Thi d Way’ hinking. The ‘Thi d Way’ pu po ed o ejec ‘old’ poli ical dis inc ions
be ween le and igh , bu mo e undamen ally in ol ed simple accep ance o neolibe al
economic p ecep s. Acco ding o S o m (2021), when coupled wi h simul aneous emb ace
18
o middle-class-o ien ed ‘cul u al poli ics’, his se ed la gely o aliena e adi ional wo king
class suppo e s by making ecen cen e-le go e nance as iden i iable wi h ising inequali y,
aus e i y, economic insecu i y, and social exclusion as igh -wing adminis a ions in h all
o same neolibe al a alism ( ha ‘ he e is no al e na i e’). The i ony, o cou se, is ha
his has helped d i e some wo king class o e s in o he a ms o ‘ ledgling’ Au ho i a ian
Neolibe als such as Donald T ump. T ump, o example, has adop ed he o ical posi ions on
issues such as deindus ializa ion, globaliza ion, and economic ma ginaliza ion ha , while
equen ly lacking in subs ance (much less cohe ence), ne e heless appeal o some ( o me )
cons i uen s o he le by p o iding hose a lic ed by neolibe al economics wi h an appa en
‘champion’ and an accompanying sense ha hey a e ‘no being igno ed’.
Second, and as discussed ea lie , managing he discon en o he lose s du ing he Neolib-
e al Boom had a (pa ly) ma e ial basis – he household deb accumula ion ha , in e alia,
a enua ed consump ion inequali y p io o he GFC and G ea Recession. The b eakdown
o his mechanism since he GFC and G ea Recession began o ha e demons able poli -
ical consequences as ea ly as he middle o he las decade. Hence acco ding o Fe guson
e al. (2020), while he social poli ics o acism and sexism we e impo an ac o s, economic
conside a ions con ibu ed o Donald T ump’s winning he Republican nomina ion o P es-
iden in 2016, and subsequen ly encou aged a ious o e s who had ei he abs ained o o ed
Democ a in he 2012 US P esiden ial elec ion o o e o T ump in his succcess ul bid o
o ice. This sugges s ha social poli ics aside, economic ac o s ha e been ‘w i en h ough’
ecen US elec ion esul s. In a simila ein, Bosse e al. (2022) s udy he ela ionship
be ween an index o economic insecu i y and poli ical p e e ences in he US and UK, inding
ha inc eased economic insecu i y is associa ed wi h bo h inc eased poli ical pa icipa ion
and mo e suppo o conse a i e poli icians and poli ics – in pa icula , Donald T ump
p io o he 2016 US P esiden ial elec ion, and he ‘lea e’ campaign in he UK p io o he
19
2016 e e endum on B exi .13 In sho , when i comes o unde s anding he cu en junc u e
and wha is equi ed o a oid a u u e o Au ho i a ian Neolibe alism, we could do wo se
han o pa aph ase Bill Clin on’s o me s a egis James Ca ille: ‘i ’s ( o a subs an ial
ex en ) he economy, s upid’.14
Mo eo e , and despi e i s neglec by con empo a y cen e-le pa ies, he e a e easons
o belie e ha i is possible o build a democ a ic elec o al coali ion a ound he win ace s o
Social Capi alism iden i ied in igu e 3 (social democ a ic co po a ism and libe al democ acy)
d awing on (among o he s) he adi ional elec o al base suppo i e o social democ a ic
co po a ism in he economic sphe e. In o he wo ds, Social Capi alism is no a me e ‘pipe
d eam’ ha would ine i ably ail o ga ne suppo a he polls.
Figu e 4 plo s he sel -iden i ied social and economic iden i ies o o e s in he 2016
US p esiden ial elec ion. I e eals ha while T ump o e s we e eliably conse a i e on
social issues, hei a i ude o he economy was a mo e mixed – so ha his coali ion
s uggled o cohe e on economic ma e s. Clin on o e s we e, howe e , a mo e cohe en ,
being unambigiously libe al on social ma e s and unambiguiously p og essi e on economic
ma e s, hei ‘libe al’ iews (as epo ed in he da a used o compile igu e 4) in ol ing,
among o he hings, suppo o go e nmen in e en ion in he economy and suppo o
p og essi e axa ion in o de o educe income inequali y. The cohe ence o his coali ion
bodes well o Social Capi alism because i sugges s unequi ocal suppo among a la ge
elec al g oup o bo h dimensions (economic and social) o he p ojec .15 I is also wo h
no ing in passing ha igu e 4 e eals li le o no elec o al suppo o he combina ion o
13See also Gab iel e al. (2023), who connec de e io a ions in mac oeconomic pe o mance esul ing om
aus e i y policies o educed us in poli ical ins i u ions and inc eased suppo o ex emis poli ical pa ies.
14In ac , and in keeping wi h he ‘complici y o he le ’ no ed p e iously, he a gumen can be made ha
had Clin on unde s ood he ull impo and ami ica ions o Ca ille’s claim a he ime, we migh ne e
ha e a i ed a he cu en junc u e.
15Acco ding o D u man (2017, p.10), no less han 44.6% o he 2016 US elec o a e a e ound in he sou h-
wes quad an o igu e 4, which co esponds o he sou h-eas quad an (occupied by Social Capi alism) o
igu e 3.
20
Figu e 4: Poli ical Di isions in he 2016 US P esiden ial Elec ion (Sou ce: D u man (2017,
p.9))
social libe alism and economic conse a ism (in he sou h-eas quad an o he igu e) ha
co esponds o p ecisely he posi ion ha he Mode n Cen e-Le has sough o occupy
(see he no h-eas quad an o igu e 3 and e ious discussion he eo .)
Finally, and les p e ailing media na a i es gi e he imp ession ha ma e ially discon-
en wo king and middle-income households ha e dese ed his o ically le -leaning pa ies
al oge he , he esul s o he 2020 US P esiden ial elec ion se e as a eminde ha adi-
ional sou ces o suppo o social democ ac ic co po a ism pe sis s (and can he e o e be
buil upon). Acco ding o es ima es de i ed om exi polls conduc ed by Edison Resea ch
o he Na ional Elec ion Pool and epo ed in he New Yo k Times on No embe 3, 2020,
while ully 55% o college educa ed o e s o ed o Democ a ic candida e Joe Biden (com-
pa ed o 42% o Donald T ump), he non-college-educa ed o e was e enly spli be ween
he wo candida es (49% each). Meanwhile, T ump – no Biden – was he candida e o he
21
a luen . Biden won he o es o 57% o o e s wi h household incomes less han
$
50,000 pe
annum and 56% o o e s wi h household incomes o
$
50,000 –
$
99,999 pe annum (compa ed
o 42% and 43%, espec i ely, o T ump). T ump, meanwhile, won 54% o he o es o he
28% o o e s epo ing household incomes in excess o
$
100,000 pe annum, compa ed o
Biden’s 43%. Finally, o he 19% o o e s who epo ed ha ing a union membe in hei
household, 57% o ed o Biden (as opposed o 40% o T ump).
Wha all his sugges s is ha Social Capi alism is poli ically iable: he e exis s a la ge
and cohe en co e o suppo among he elec o a e o social democ a ic co po a ism com-
bined wi h libe al democ acy, including among he ‘ adi ional’ bases o suppo o social
democ a ic co po a ism (such as less a luen households and union membe s) who ha e he
mos o gain om he economic dimension o Social Capi alism. The p essing ques ion is:
can adi ionally le -o -cen e poli ical pa ies wake up o his eali y and commi o sup-
po ing he so o economic e o ms om which hei adi ional (and s ill ela i ely loyal)
o ing bases will bene i ?
5. Conclusions
This pape has a gued ha he capi al-ci izen acco d ha os e ed social cohesion du ing
he Neolibe al Boom (1990-2007) had a ma e ial basis ha b oke down amids he 2007-09
GFC and G ea Recession. The esul has been a c isis in he capi al-ci izen acco d which,
a his junc u e, equi es ins i u ional enewal. Two iable al e na i es ha e been iden i ied:
Au ho i a ian Neolibe alism and Social Capi alism. The o me seeks o ‘pa ch up’ neolibe -
alism h ough appeal o illibe alism – speci ically coe sion and ‘di isi e consensus building’
– designed o ( inally) ins i u e a capi al-ci izen accco d o he so o iginally en isaged by
Hous on (1992), based on ‘less b ead and a lo mo e ci cus’. Social Capi alism, meanwhile,
seeks o anscend neolibe alism. I is based on a social democ a ic co po a is app oach
22
o he economy designed o deli e inclusi e and sus ainable g ow h and so elimina e a i s
sou ce he discon en o he lose s inhe i ed om he neolibe al e a. This, in u n, would
libe a e Social Capi alism o pu sue a libe al democ a ic app oach o ci il socie y, by eeing
i om he need (e e -p esen in he al e na i e Au ho i a ian Neolibe al egime) o manage
he discon en o he lose s h ough illibe alism. Finally, i has been a gued ha he Social
Capi alis p ojec so-desc ibed is poli ically iable – i only he adi ionally le -o -cen e
pa ies ha once emb aced his posi ion would do so again and, in he p ocess, unde s and
he lack o inna e poli ical iabli y associa ed wi h hei ecen ly- a ou ed combina ion o
neolibe al economics and social libe alism.
The e can be no doub ha he concep o sus ainable and inclusi e g ow h a icula ed in
his pape is oo na ow o be a panacea. I can and mus be b oadened o include, among
o he hings, clima e conce ns and aspec s o inequali y and inequi y along he dimensions
o ace, gende , and sexual o ien a ion. Ne e heless, i is well o emembe ha s uc u al
change in he labou ma ke and he accompanying disempowe men o wo ke s ha e been
a, i no he, cen al ea u e o he ise and consolida ion o neolibe al capi alism o he
bes pa o ou decades. Focusing on he dis ibu ions o income and weal h be ween
social classes, he accompanying inancial de elopmen s ha ha e ei he con ibu ed o o
acili a ed disad an ageous changes in hese dis ibu ions, and he labou ma ke as a c i ical
nexus linking he majo pa hologies o con empo a y capi alism he e o e appea s wa an ed.
On his iew, he ‘na ow’ concep ion o inclusi e and sus ainable g ow h adop ed in his
pape is an impo an poin o depa u e, and he economic e o ms associa ed wi h i
can be seen as a c i ically impo an i s s ep owa ds he ejec ion o neolibe alism (and
illibe alism) and he accompanying econs uc ion o he economy and ci il socie y.
Mo eso han b oadening he concep o Social Capi alism, he immedia e ask ahead
in ol es pe suading ( o me ly) sympa he ic poli ical pa ies o he u gen need o a mode n
o m o social democ a ic co po a ism ha p o ides he social s uc u e necessa y o guide
23
