In the United States, Harry Truman's Fair Deal and Lyndon Johnson's expansion of the welfare state and Civil Rights legislation led to the longest, most sustained economic boom in the nation's history. At a time when taxes on the wealthy were the highest they'd ever been, union strength was stronger than ever, America was the most prosperous. wealthiest country in the world. This prosperity was largely shared by everyone; wages for the top and bottom rose from 1945 to 1970, and the middle class was robust.
European countries, notably Scandinavia, Germany, France, and Britain, also experienced huge economic growth. Britain's Labour Party enacted universal health care and created a large social safety net, while taking control of the coal and railroad industries for public use. Social-Democratic parties in Scandinavia were almost always in power, and they used the post-war economic boom to ensure that all of their citizens would enjoy free and universal health care, education, strong labor laws that created high-paying, stable jobs and lasting, well-endowed pensions.
At the expense of the wealthiest citizens and big businesses, and to the chagrin of economic liberals and corporations, the vast majority of society in these countries were able to enjoy some of the best years of prosperity that Europe and North America had not seen for decades.
But then in 1970s and 1980s, things changed; the public sector was deemed too large, deficits too severe to maintain such a system. These countries' governments were too large and clunky to be competitive in an international marketplace. The tax burden was too high, unions had too much power, and business was being stifled by burdensome regulation.
The answer, said conservatives and the Right, was to radically alter the economy from a socialist-inspired, leftist, closed economy to one that would promote "liberty" and "freedom".
Low taxes, low spending, privatization, deregulation, weakening of unions, free-trade, free-markets, reduced pensions and benefits: these were the solutions to the terrible problems Keynesian and left-wing economics had produced over the past 30 years.
So the shackles came off. Business was unleashed, and economic freedom was pursued so that all could enjoy the prosperity that was sure to come.
Led by neoliberals like Margaret Thatcher and Ronald Reagan, massive tax cuts were enacted, coupled with privatization of formerly-state industries and the reduction in the power of unions. Free-trade deals were signed, banks, businesses, and corporations saw their regulations shredded.
In the United States, Wall Street was treated with a "hands-off" approach, culminating in the efforts of Democratic President Bill Clinton, who repealed the New Deal-era banking regulations that had largely averted massive economic crises. Corporate taxes were lowered to foster competition. Capital gains were taxed at a lower rate so that investment could grow. President George W. Bush enacted two of the most massive tax cuts in the history of the country at a time when the U.S. had experienced its first few years of budget surpluses in decades.
The result of all these policies, with all the wishes and promises of the Right, has been a complete and utter failure. Deregulation of the financial sector directly led to the most morally indignant, self-induced, criminal economic crises since the Great Depression - to the cost of trillions upon trillions of taxpayer money and the loss of millions of jobs.
While corporate profits have soared, the average wage for middle-class Americans has barely moved. Income inequality is at the highest its been for 80 years, and millions of citizens are in poverty. Unions have become decimated, but this has not led to any kind of stability in the private sector, or a reduction in budget deficits either at the state or federal level. Thousands of Americans die every year because they cannot afford health insurance to pay for the care they need. Yet the chances of the U.S. receiving a universal health care system any time in the near future is incredibly low.
In Britain, Margaret Thatcher's anti-union, pro-free-market, neoliberal reforms massively increased inequality. Tony Blair's "Third Way" economic policies did nothing to correct this, despite being a part of a Labour government that was supposed to work in the interests of the working class.
Germany's Social Democratic Party enacted right-wing labor market reforms that were supposed to halve unemployment; while unemployment did go down, millions of people now work full-time but don't earn enough money to live out of poverty and millions more are forced to receive welfare - the exact opposite of what the SPD had said would happen.
Since the end of the colonial era, many African, Latin American, and South American countries have been desperately short of cash with which to spur their economy, build infrastructure, and develop their state. In stepped organizations like the IMF and the World Bank, who loaned millions and billions of dollars to these countries, but only on the condition that they enact neoliberal reforms. The result has been crippling, unfair, immoral debt for many Third World countries; free-trade has allowed multinational corporations to take profits from those developing countries and deprive African peoples' natural resources from them; a shocking and indefensible transfer of wealth from the poorest countries on earth to the richest ones has taken place.
Now that the utter failure of right-wing economics has been exposed - and by almost all measures, they have not worked the way they were promised to -, and with the world economy laying in ruins because of these policies, almost every single government in the industrialized world is sticking with their neoliberal economic paradigm. Even supposed Social-democratic parties have almost entirely embraced this right-wing system, becoming increasingly less of a truly viable alternative to mainstream conservative parties.
It seems as though, in the face of this failure, industrialized countries are doubling down on the veracity of this narrative. People like British Prime Minister David Cameron and conservative parties like the Republicans in the U.S. are acting as though government spending and huge budget deficits caused this financial crisis, when they are largely simply the result. In order to fix the mess that neoliberal, right-wing economic policies created, the solution is to do even more of them!
So it is that millions of people must face severe, draconian cuts in social spending - there goes health care, pension benefits, education funding, and infrastructure improvements. They are told that they must d0 more with less, because....well, because they just have to.
But why must the only answer be austerity? Why is the "natural" solution to reduce government, to reduce unions, to reduce pensions, to reduce spending? How is it, that after such an obvious and upsetting upbraid to the dogmatic mantra of economic liberalism, that right-wing economic policies are not only being implemented, but are the only types of policies even seriously being discussed?
No one is forcing David Cameron's Conservative Party to proceed on the course they are; they simply have different priorities about how to proceed with governing the country.
That is essentially it: a matter of priorities. For 35 years, European and American governments have been run by financial elites, businessmen, and members of a peculiarly fiscally conservative clique who have enacted policies that their ideology tells them will benefit everyone. It hasn't worked, and only a small percentage of society has benefited; of course, those who enacted these policies just so happen to also be the ones who have benefited the most.
This group is telling society that these cuts, these policies, will be painful but must take place and will eventually pay off. But why does the pain have to be felt by those who least deserve to feel it?
Would it be just as painful to end corporate welfare? To close tax loopholes? To strengthen labor unions? To enhance the safety net? It would be - but for different people. And that is all the difference. As long as the industrial economy's engine is the corporation and Big Business, so too will fiscal policies be neoliberal and inadequate. Growth will be slow, life will be harder for most people, but everyone will be told it is the only way.
But it doesn't have to be.
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