The Euro System as a Laboratory for Neoliberalism: The Case of Spain

• Author: Fernando López‐Castellano,Fernando García‐Quero
• Date: 01 January 2019
• Published date: 01 January 2019
• DOI: http://doi.org/10.1111/ajes.12261

The Euro System as a Laboratory for

Neoliberalism: The Case of Spain

By Fernando López-CasteLLano* and Fernando GarCía-Quero†

abstraCt. Since the 1970s, neoliberalism has evolved from ideology to

political agenda, from political program to public policy, and from

public policy to a system that replaces democratic control over

economic policy with a system of elite economic management. This

process of change has been possible due to the endorsement of a

meta-political theory that destroys democracy and legitimizes

technocratic despotism, financial deregulation, the debasement of

labor into a new proletariat, and the purging of constitutional politics.

In this article, we analyze this profound transformation of social and

legal relations in the “euro system” and, specifically, in the regressive

policies that have emerged from the “crisis” in Spain, a peripheral

country of the European Union. The problems in contemporary

Europe are a direct consequence of the neoliberal version of European

economic unity. Their solution will depend on the capacity of the

member states to create a social Europe that strengthens institutional

democracy and develops universal systems of social protection. This,

in turn, will depend on the ability of citizens to remodel state

institutions in accordance with new social goals that place life at the

center.

American Jour nal of Economics and Sociology, Vol. 78, No. 1 (Janua ry, 2019).

DOI: 10 .1111/ajes.122 61

© 2019 American Journa l of Economics and Sociology, Inc.

*Associate Professor in the Department of Applied Economicsat the University of

Granada (Spain) and head of the research group “Economic History, Institutions and

Development.” He specializes in history of economic thought. Published in peer-re-

viewed journals, such as Journal of Economic Issues and Iberian Journal for the History

of Economic Thought. E-mail: flopezc@ugr.es

†Lecturer in the Department ofApplied Economics at the Faculty of Social Science

and Law (University of Granada, Campus of Melilla, Spain). He teaches political econ-

omy and history of contemporary economic development. Research focuses on hetero-

dox political economy and political economy of development. E-mail: fgquero@ugr.es

168 The American Journal of Economics and Sociology

Introduct ion

This work is based on the hypothesis of Pierre Bourdieu that neo-

liberalism is a “utopia” that was transformed into a political agenda

with the support of an economic theory that saw itself as a scientific

description of reality (Bourdieu 2003, 2008). Despite the fact that neo-

liberalism cannot be identified totally with neoclassical economics, it

adopts the latter’s methods, a large part of its basic assumptions, its

arguments, and its hypotheses (Escalante Gonzalbo 2016). Beyond

the neoliberal version of neoclassical economics discussed in this arti-

cle—public choice, supply-side economics, and monetarism—there

are other sorts of extensions derived from its conceptual core. Some

authors catalogue them as “new frontiers of economics” (Colander,

Holt, and Rosser 2004; Davis 2007). Among the adjuncts of neoclassi-

cal economics are the “new” institutional economics, the “new” polit-

ical economics of development, the theory of games, and behavioral

economics or neuroeconomics. Beyond their differences, and the fact

that they make assumptions on homo economicus more flexible, their

basic pillars are still the political philosophy and the methodological

individualism of the neoclassical approach.1

This article is also founded on the idea that in the Western world

there has been a profound change in social relations, which began

in the late 1970s and accelerated in the 1990s. This change has called

into question the foundations of the postwar Keynesian pact (welfare

state), in which the wage relationship or labor market was tied to

an extended social relationship (Rodríguez Cabrero 2013). In order

to promote the conditions required by the new post-Fordist regime

of accumulation and to compete with other states, participants, or

economic areas, the state adopts other functions. As Harvey (2007)

argues, the process of neoliberalization destroys previous institutional

frameworks and promotes the development of commercial practices

through liberalization, deregulation, and privatization. Through state

action, such as the deregulation of financial assets, new markets are

generated, including a low-wage labor force, an action that is intensi-

fied by the implementation of the neoliberal model (Merchand Rojas

2012). In order to recover the business surplus and to discipline

the workforce, an ideological offensive has been launched to reduce