It wasn’t a black swan.
The term was coined by Nassim Taleb, a former hedge-fund manager turned author of bestselling books on finance, and it served as a popular description of the 2008 financial crisis. It refers to an event of such peculiarity that it cannot be predicted or related to preceding developments. All swans are white until they aren’t. Taleb’s characterization had that charisma of the paradoxical analysis that says this can’t be analyzed. At best you can expect the unexpected.
As months have passed and molten panic has cooled to the rocky facts of a global slowdown, this idea has been quietly abandoned. There are still a few ideologues who think the crisis was caused by the Community Reinvestment Act or by a claque of particularly invidious bankers; that it was just a few ill-advised or morally dubious decisions made by lenders, borrowers or speculators sometime in the 2000s that brought the economy to a halt. It is now high time—and highly possible—to move toward a more thorough understanding, and it is in this direction that much of the thinking and writing about the crisis has been going.
In lieu of the black swan theory, the following things have become clear. The crisis wasn’t financial but economic. The supposed failure of liquidity was, in fact, insolvency; it was a long time coming; finally there was not enough actual value (as opposed to paper profits) in the circuits to sustain the economic order. This wasn’t a momentary event; we are in the fourth year of an unfolding sequence that is itself the climax of a lengthier reorientation of politics, economics and social relations commonly known as neoliberalism.
Scarcely existing before 1980, the term “neoliberalism” became commonplace between the fall of the Berlin Wall and the fall of Lehman Brothers. It is surely tossed about more than understood. This much is something like common knowledge: neoliberalism’s roots are in the classical liberalism of Adam Smith and John Stuart Mill, and the idea that a government exists to assure the individual liberty and economic opportunity of its people. Its parents are Margaret Thatcher and Ronald Reagan; thus, its birth is often dated to around 1979. It is inseparable from the idea of globalization, but it seems to emanate from the United States. Its ideological field contains both Republicans and Democrats; more confusing, it includes liberals and conservatives, and even—especially—neocons. It is the triumph of the liberal idea at a planetary scale. In Thatcher’s famously implacable pronouncement, “There is no alternative.”
And yet, lacking a serious challenge globally and going from electoral victory to victory in its home countries, neoliberalism has nonetheless managed to overcome itself. Or at least to weaken so dramatically as to seem vulnerable, if not its own worst enemy. The question of what next—whether we should be imagining an alternative to the complex of political and economic relations or pursuing a restoration—must be rather high on our agenda.
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This is the question of John Quiggin’s Zombie Economics, albeit phrased differently. The book offers itself as a compendium of economic ideas from the past several decades that should have been slain by the force of overwhelming counterevidence—ideas that, nonetheless, still walk among us, neither living nor dead. Quiggin, an Australian economist, dodges the term “neoliberalism” (as well as Reaganism, Thatcherism, et al.) because of concerns about ideological overtones: “The most neutral term I can find for the set of ideas described by these pejoratives is market liberalism.” Why he would pursue such politesse in the midst of what will reveal itself as a decisive taking of ideological sides is not entirely clear.