The financial crash of 2008 did serious injury to conventional economic wisdom. Not only was the judgement of expert forecasters questioned, so too was the widely held view that free markets had the capacity to self-correct. Market fundamentalism had prevailed for 30 years, albeit in various iterations and distinctive policy permutations: the ballooning deficits of Reaganism, the fiscal austerity of Thatcherism, the Clintonite-Blairite Third Way. However, the crash raised major doubts about the timeless truths of neoclassical economics. Why did an emergency intervention necessitate a turn to Keynesian injections of cash into the economy? And what sort of rationality underpinned longer-term quantitative easing and, in the case of a few central banks, negative interest rates? The (more politically radical) generation that came of age in the aftermath of the crash began to ask whether the mathematical modelling of neoclassical economics properly reflected the complexities of the real world. Were self-regulating markets no more than a mirage?
Further disillusionment soon followed. Far from borders withering away due to the seemingly unstoppable momentum towards globalisation, instead we have seen a return to fortress economies. In the United States, Trumponomic protectionism entailed the abandonment of traditional Republican principles, and the Covid pandemic, compounded now by the invasion of Ukraine, exacerbated trends towards nationalistic forms of political economy. A long-standing insistence on cost being the bottom line has given way – quickly and unexpectedly – to the strategic importance of energy sources and supply chain resilience.
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