Published online by Cambridge University Press: 10 March 2021
All along the line, human society had become an accessory of the economic system.(Polanyi, 1945: 75)
This chapter outlines the utopian intellectual project of contemporary free market thought and politics (what is generally referred to as ‘new liberalism’ or ‘neo-liberalism’) from its origins as an outsider critique of the post-war social democratic settlement to its triumph in the wake of economic and political crisis from the 1970s onwards. The discussion initially draws on some core ideas from Friedrich Hayek (1944, 1960) and associates, who provided the intellectual legitimacy for the political choices and ideas that predominated in recent decades. It then turns to Karl Polanyi's (1945) Origins of Our Time: The Great Transformation, where he first gave theoretical expression to the concept of a ‘market society’. Published just after the Second World War and in the context of emerging social democratic welfare states, these thinkers marked out the ideological divisions that have dominated politics since. The chapter considers the relationships between neo-liberal epistemology and penal politics and thinking during and after the 1980s. It concludes by noting that the aftermath of the financial crisis of 2007–08 heralded a false dawn for those who predicted that such policies would wither away. However, recent political disruptions and scandals arising from public contract failures or the removal of private, for-profit companies providing prison and resettlement services may be contributing to a tipping point in the demise of faith in the putative ruling idea of our time, the efficiency of supposedly free markets.
The ‘culture’ of marketisation
At its essence, marketisation reflects a model of society that is rooted in restructuring the public sphere in accordance with radical utilitarian, individualistic and economistic values. Marketisation describes a manifestation of ‘“free market” or “neoliberal” policies, … [comprising] taxation structures that favor capital accumulation over income redistribution, industrial policies that minimize the presence of the state in private industry, and retrenchment in welfare spending’ (Prasad, 2006: 4). The ensuing cultural revolution was not historically predestined, however, and it is an open question whether free market ideas ever secured the degrees of popular consensus claimed for them by governments and policy makers.