Crisis Neoliberalism and the Global Retrenchment of Social Welfare: A Second 'end of History'?

Just as the social welfare state arose to reproduce and mediate the contradictions of an ascendant phase of capitalist expansion, the ongoing retrenchment of the social welfare state forms part of an epic struggle to maintain profits within the contradictory limits imposed by a deepening structural crisis. Political opposition to social spending cutbacks was initially weak as neoliberalism proved adept at fragmenting the traditional bases of popular resistance, leading democratic/social democratic parties to succumb to the dictates of global capital and opting for “softer, gentler” neoliberal reforms as the “only alternative” to savage austerity and neoliberal restructuring. In the 1990s, an earlier phase of ascendant neoliberalism yielded the triumphant proclamation of an “end of history” which subsequently came crashing down in the throes of a deep and persistent recession. In more recent years, a deeply dimensioned political trend to the right has refueled and accelerated the tendency towards establishing an ever lower common denominator for recalibrated social welfare regimes, taking on proportions of a new “realism” in policy making that amounts to a second “end of history.” This paper explores the future prospects of the embattled social welfare state, using comparative observations from its peak paradigmatic expression in the Nordic countries of prior decades as well as from its most minimalist form under US “exceptionalism.” The precarious social consensus that sustains this trend contains its own fissures that underlines the contradictory character of neoliberal crises. Social democratic parties that once championed the universalization of comprehensive social welfare policies but have since embraced acquiescence to neoliberal retrenchment, presage the emergence of new oppositional forces that reject these parties. What remains to be seen is whether an upsurge of popular mobilization can successfully disrupt and detain the hardening policy regimes of neoliberal retrenchment.