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Before Thatcher...
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this post was submitted on 02 Apr 2025
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chapotraphouse
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from my understanding it's that the west gets some form of wellfare state and the global south stays fucked. Also increase in public spending to counter recessions instead of austerity.
Im sure someone has a better answer though.
yeah its basically that. in brief: government intervenes in the economy to do welfare and to take an economy out of a crisis (which Keynes considers to be both periods of high unemployment but also when GDP growth is too high). it was the dominant form of economic theory in the west until stagflation (which is when unemployment and recession are so bad that even the government cant fix it with keynesian mechanisms) and oil crises hit in the 1970s-80s, so governments had to sell national monopolies and defund all their social programs to stay afloat, which is where neoliberalism comes from.
Had to? Or opportunistically started to treat government spending as if it worked like a checkbook with the explicit purpose of punishing the working class?
yeah i kind of oversimplified the story. the finance sector used its leverage at the time to force governments to pay out their debts. of course a more pro-worker government could choose not to do that, but in a bourgeois dictatorship the state and banks work in tandem more or less.