The US neoconservatives insisted that ‘liberating’ Iraq would be a ‘cakewalk’. The US defense secretary Donald Rumsfeld predicted the war would last six days, and Blair claimed that many fewer civilians would be killed as a result of the invasion than in any year under the rule of Saddam.15 Most of the Anglo-American media expected Iraqis to greet US and British troops with flowers and that resistance would collapse in short order. They were entirely wrong, and it was the opponents of war who were again proved correct.
A new colonial-style occupation of Iraq would, I wrote in the first week of the 2003 invasion, ‘face determined guerrilla resistance long after Saddam Hussein has gone’ – and the occupiers would ‘once again be driven out’.16 As it turned out, British troops faced unrelenting armed attacks until they were finally forced out of Basra in 2009, as did US regular troops on a far larger scale until they were withdrawn from Iraq in 2011.17
But it wasn’t just in judgments on the war on terror and the occupations of Iraq and Afghanistan that opponents of the New World Order were shown to be right and its political champions and cheerleaders to be talking calamitous nonsense. For thirty years, the West’s political and corporate elites insisted that only the elixir of deregulated markets, privatisation, free trade and low taxes on the wealthy – the catechism of the Washington Consensus – could now deliver growth and prosperity. And in the wake of the Soviet collapse and international retreat of the left, they were able to use their overriding influence and grip on international institutions to spread a globalised model of neoliberal capitalism across the world.
The long boom that followed was made possible by the integration of hundreds of millions of educated, low-waged workers from eastern Europe and Asia into the international capitalist market. Combined with the wider weakening of organised labour, deregulated expansion of international finance and a flood of cheap imports, the result was a corporate profits bonanza and global class power-grab. But for much of the world, the boom of the 1990s and early years of the new century meant stagnating real wages, far slower growth than in the postwar era, and dramatic increases in inequality and insecurity.18
Long before the crash of 2008, the ‘free market’ model and its dismal record had been under fierce attack, including from the anti-corporate globalisation movement that came to international prominence during the 1999 World Trade Organisation protests in Seattle. In grassroots campaigns and social forums across the world, the case was hammered home that the neoliberal order was handing power to unaccountable banks, private corporations and Western-controlled global institutions, fuelling poverty and social injustice, destroying communities and the environment, eviscerating democracy, undermining workers’ rights – and was both economically and ecologically unsustainable.19
In contrast to corporate-aligned New Labour politicians such as Gordon Brown, who claimed ‘boom and bust’ to be a thing of the past, critics of the free-market model dismissed the idea that the capitalist trade cycle could be abolished as absurd. In fact the argument could not have been clearer: deregulation and financialisation had made it even more unstable, and the reckless promotion of debt-fuelled financial speculation and credit and housing bubbles would lead to crisis.20
It wasn’t a coincidence that the large majority of economists in the West who predicted a major debt crisis, a housing or credit crash or that the neoliberal model was heading for breakdown were broadly on the left: from Dean Baker and Steve Keen to Ann Pettifor, Paul Krugman, David Harvey and Richard Wolff.21 Whether Keynesians, post-Keynesians or Marxists, none accepted the market fundamentalist ideology used to legitimise the vast transfer of wealth and power from labour to capital that took place over thirty years in the name of economic liberalism. All understood that, contrary to neoliberal orthodoxy, deregulated markets don’t tend towards equilibrium but deepen capitalism’s inbuilt tendency to generate systemic crises.
So while in Britain, all three main political parties backed ‘light-touch regulation’ of the financial system22 – only disagreeing about quite how light it should be – their critics had long argued that City liberalisation would sharply raise the risk of financial breakdown and increase the damage to the rest of the economy.23 When Alan Greenspan, the free-market US federal reserve chairman who presided over the financial deregulation that paved the way for the sub-prime crisis, later told Congress he accepted his ideology and ‘view of the world’ were ‘not right’ after all, he was catching up with what opponents of neoliberal capitalism across the world had been saying all along.24 And when Adair Turner, chairman of Britain’s Financial Services Authority, acknowledged that much of the deregulated City of London’s activity was ‘socially useless’, he was echoing what critics of the finance-driven model had insisted long before it broke apart.25
That case was made throughout the years of market idolatry. When Western-prescribed market shock therapy was used to restore capitalism in Russia and eastern Europe, Western elites hailed it as a dawn of freedom and prosperity. But opponents of the new order predicted it would lead to economic and social disaster. Sure enough, eastern Europe’s 1990s slump was deeper than the Great Depression of the 1930s. And the neoliberal medicine of deregulation and mass privatisation that Russia was forced to swallow ushered in the greatest peacetime collapse of an industrial economy in history, driving 130 million people into poverty and millions to premature deaths.26
Whether on a local or international scale, the story everywhere followed the same pattern. Privatisation was central to the neoliberal programme to bring every part of the economy and social provision into the corporate profit system. In Britain, critics warned that the Blair government’s drive to privatise public services in the name of choice and value for money would cost more, reduce accountability and transparency, drive down workers’ pay and conditions, and increase bureaucracy and political corruption.27
Which is exactly what happened. By 2011, for example, it was estimated that £53 billion-worth of private finance initiative schemes to hand over the building and running of hospitals, schools and prisons to private companies on decades-long contracts would end up costing the state up to £25 billion more than if the government had paid for them directly.28 The following year, a cross-party committee of MPs found PFI to be expensive, inefficient, inflexible and unsustainable – but of course delivering ‘eye-watering profits’.29
And in the European Union, where neoliberal ideology, corporate privilege and market orthodoxy were embedded ever more deeply into each treaty revision, the result was ruinous. The combination of a liberalised banking system with an undemocratic, lopsided and deflationary currency union that critics (on both left and right in this case) had always warned risked breaking apart without large-scale tax-and-spend transfers was an economic disaster waiting to happen. The crash of 2008 then provided the trigger for what would become the pulverising economic and social crisis of the eurozone.30
The meltdown at the heart of the global economic system, described by Bank of England governor Mervyn King as the worst financial crisis in capitalism’s history, turned a powerful case against the neoliberal order into an unanswerable one. It was after all the deregulation of financial markets, the financialisation of every part of the economy, the pumping up of credit to fill the gap left by stagnating wages and the loss of state leverage from mass privatisation that triggered the crash and turned it into a prolonged crisis – and all these flowed from the heart of the neoliberal system and its ever more dysfunctional operation.
The governing elites who had championed it, including King, had been shown to be disastrously wrong: not only about the economic and social impact of the ‘free market’, but about how it actually functioned in reality. Critics