Conclusion

The attentive reader has certainly remarked that Chapter 6 on the impact of New Public Management (NPM) on China’s economy and society concludes with a long section on the rebalancing of Chinese society, whereas there is no such section in Chapter 5 on the impact of NPM in the West. There is a good reason for that: the West has not taken any significant measures to reduce income inequalities and poverty rates during the years of the triumph of neoliberalism and of its two armed wings, the ‘Washington consensus’ and the NPM (1979–2008). On the contrary, the persistent implementation of the neoliberal project in the West, which has in fact delegated to the market (or more precisely to the market ‘freed’ from state interferences) the task of developing and distributing wealth, has further deteriorated income inequality and poverty, as I have shown in Chapter 5. ¹ Well-documented research shows that, since the beginning of capitalism, income inequalities have not ceased to increase, except during some limited periods such as the 30 years after the Second World War. However, from the beginning of the neoliberal era (1980s) inequalities started to increase again and then stabilized at a relatively high level. ² This is one of the major sources of the 2008–11 crisis, as Joseph Stiglitz very well explains:

in the years immediately preceding the crisis, … domestic demand had also been weakened by high oil prices. The problem of high oil prices and growing inequality – reducing domestic aggregate demand – afflicted many other countries [in addition to the USA]. Income inequality increased in more than three-quarters of OECD countries from the mid-1980s to the mid-2000s, and the past five years saw growing poverty and inequality in two thirds of OECD countries. ³

Moreover, ‘growing inequality in the US and elsewhere around the world … shifted money from those who would have spent it to those who didn’t thus reducing global aggregate demand.’ ⁴ As Stiglitz and associates have explained for years:

in the world of globalization, global aggregate demand is what matters. If the sum total of what people around the world want to buy is less than what the world can produce, there is a problem – a weak global economy. ⁵