Managing the Discontent of the Losers Redux: A Future of Authoritarian Neoliberalism or Social Capitalism?

Neoliberalism eviscerated the value-sharing ethos of the postwar golden age (1945–1973), seeking to maintain social cohesion in civil society by "managing the discontent of the losers": reconciling working households to the realities of the neoliberal labor market by means of coercion, distraction, and debt accumulation (the last serving to limit the growth of consumption inequality in the face of burgeoning income inequality). The global financial crisis undermined the process of household debt accumulation, creating a crisis of neoliberal accumulation. Key to the institutional renewal required to address this crisis is managing the discontent of the losers inherited from the neoliberal era. One possibility is authoritarian neoliberalism, which involves amplification of the "coerce and distract" elements inherited from the previous regime. The alternative is social capitalism: a renewal of social democracy that eliminates the discontent of the losers and so reduces both the need and desire for illiberalism.