Neoliberalism crisis: Governance and inequality

Abstract

The fast rise of the welfare state in its developed and developing version paved the way to a generation filled of illusions about the endless economic prosperity. What it is more, the economic crisis at late 70`s and early 80`s ended these illusions rapidly; restructuring the state was imminent. The economic recession was the pretext to start restructuring the global economic system (that had showed low economic growth rates) with the homogeneous neoliberalist policies. In this sense, the world was now opened to a massive economic (financial) globalization.

Thirty years after, neoliberalism has proved that its arrive has not solved but sharped the welfare state inherited problems. With its austerity policies, neoliberalism just undermined humane life conditions, bringing the state benefits down by means of privatization; decreasing fiscal revenue to implement future state policies, and weakening substantially individual incomes of the population with labor flexibility policies.

This process leads to think about the state`s role in times of neoliberal globalization, where state sovereignty is limited by the economic liberalization process, huge private investment dependency and international loans, resulting in the obstruction of the political exercise in favor of citizenship educational process and accountability mechanisms.

This article will outline the problems inherited from the XX century most important state models, welfare and neoliberalist, in contrast to the recent major recession and the state`s task to reduce inequalities.