The Return of the Very Cruel Economic System

This chapter is divided into three sections.  The first section examines the origins of the neoliberal policy consensus at the OECD.  The fist major rupture in the hegemony of the Keynesianism (neoclassical synthesis MKI) at the OECD came with the publication of the McCracken Report in 1977.  Some left critics have come to regard the Report as the first truly neoliberal policy document sponsored by the OECD.  I intend to challenge this interpretation somewhat by arguing that the Report is better understood as a rupture in the Keynesian consensus and not necessarily a fully worked-out alternative and certainly not evidence of a coherent neoliberal paradigm.  The second section, attempts to clarify the relationship between monetarism and neoliberalism.  After a brief theoretical presentation, I will then examine the conference proceedings from the 1978 Boston Federal Reserve’s After The Phillips Curve: Persistence of High Inflation and High Unemployment conference.  This conference is interesting because within its proceedings it is apparent the degree to which Keynesians like Robert Solow and Barry Bosworth (more so) were beginning to cross over from the demand to the supply side.    The third section examines the OECD Jobs Study released in 1994.  I argue that the publication of this document signals the hegemony of the neoliberal policy consensus.

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