I hope to summarize Gerard Dumenil & Dominique Levy’s Capital Resurgent: Roots of the Neoliberal Revolution, 2004.
But time being what it is, I’ll just start here with the upshot, from page 191-192.
Neoliberalism is the economic, political and social dominance (resurgence) of finance. (Per Marx: M-C-M’. A crisis tendency to financial apotheosis is characteristic of capitalism.) What has neoliberalism contributed? According to Dumenil and Levy (2004), “Finance can claim responsibility for at least three kinds of actions”:
1) Finance induces the vast society-wide engorgement of management. This happened in the current period, as at the turn of the 20th century, through mergers and because of the need to organize and finance (192), as well as to repress labor for the sake of profit-enhancing efficiency.
2) For a while (1990s), finance allocated capital toward new technologies. Dumenil and Levy demonstrate that the profit-rate decline that began in the late 1960s was caused by a decline in investment in technological development.
They also show that societies don’t need finance-dominated capitalism, which comes with large social and economic costs, to allocate capital to technological development. For example, states (with regulated and disciplined finance) have been excellent at inducing technological development, as in the early-to-mid 20th century. Their economic policy institutions (such as the Bretton Woods institutions) could have adjusted, rather than turning over the reins to financial capital.
When investment in technology slowed down in the late 1960s, and profits likewise declined, a path to retain the “dream of civilized capitalism” (206) was still available. “The crisis of the dollar should logically have led to reinforcing world institutions, governed by international bodies that were more independent from private interests” (192). “There was no need to abandon fixed exchange rates or limits on capital mobility, unless they were required to restore American preeminence” (192, my italics). The failure to pursue “civilized capitalism” alternatives was not the result of a lack of “intellectual capacity to conceive of such alternatives, but rather the (capitalist) social and political conditions…given the violence of the struggle by finance to reestablish its hegemony” (193).
In implementing some of financial capital’s policy demands, such as floating currency, economic nationalists in the Nixon administration enabled the US to maintain centrality via the dollar for at least 40 years. The costs to labor, states’ independence, investment in non-financial capital, and economic stability were huge and in some cases crippling. The inequality costs to people were savage. Many horrific environmental, social, war, political, etc. crises were launched by the resurgence of financial control facilitated by American economic nationalists (The dollar as the global reserve currency enables the US alone to go into debt and still maintain capital inflows and economic independence). Neoliberalism “is an aggressive and violent form of capitalism” (192).
3) Through its system of corporate governance, financial capital imposed society-wide constraints focused on achieving high profit rates. These high profit rates did not entail sufficient economic development, as the profits came at the expense of the working class (in ubiquitous, “efficient,” profit-maximizing management practices), and were distributed to managers and shareholders, who allocate wealth very poorly (hoarding, speculating, and squandering).