Assault on the state and on the market: Neoliberalism and economic theory

Abstract

State and market are complementary institutions. The State is the major institution coordinating modern societies; it is the constitutional system and the organizations that guarantee it; it is the main instrument through which democratic societies have been changing capitalism to achieve their own political objectives. Markets are competition-based institutions regulated by the State so that they contribute to the coordination of the economy. While Liberalism emerged in the 18th century to ght an autocratic State, Neoliberalism (a major distortion of economic Liberalism) became dominant since the 1980s and mounted a political assault on the State in the name of the market, but eventually also attacked the market. Neoclassical macroeconomics and the theory of public choice were the meta-ideologies that gave a "scientic" and mathematical allure to this assault.