The present period is one of economic turbulence but ideological stability. Despite the scale of the 2008 financial crash, there has not so far been much sign of the kind of shift in the ideas governing economic policy which followed the economic upheaval of the 1930s and the smaller upheaval of the 1970s. The 1930s gave birth to Keynesianism and social democracy while the 1970s gave birth to monetarism and neo-liberalism. But, although challenged by recent events, for the moment neo-liberalism appears to be retaining its ascendancy. How should we understand this resilience? And how should we understand neo-liberalism? These are the questions with which this essay is concerned. It makes three main claims. First, neo-liberalism is more than simply a contingent reaction to Keynesianism and social democracy. Part of its resilience as a set of ideas is that it draws upon perennial themes of classical liberal political economy, particularly concerning the nature of commercial society and the role of the state in a market economy. Second, neo-liberalism is not a unified doctrine, but has several distinct strands, which can be contradictory. Third, one of the most striking contradictions is over neo-liberal attitudes to fiscal conservatism.

One influential way of understanding neo-liberalism draws on Karl Polanyi's account of ideological development in the capitalist era. He suggested that the liberal market economy was created through deliberate policy and state action in the nineteenth century, which destroyed traditional forms of economy and society, and brought, as a reaction, the rise of collectivist and nationalist movements aiming to reimpose political control over the free market and reestablish community and security for citizens. This double movement was played out over many decades and reflected the social and political struggles which defined the modern world. Some recent analyses inspired by Polanyi have suggested that neo-liberalism can be understood as the first phase of a new double movement, with neoliberalism emerging initially in the 1970s as a reaction to the excesses of the welfare state and Keynesianism. Through the application of its ideas in the 1980s, a new era of free market dominance was enabled. But this would in turn, it was suggested, be followed by a further reaction to curb its excesses and reimpose political controls over the market.