Politics of economic collapse: a comparative historical sociology of the 2008 crisis

Abstract

The 2008 financial crisis was the second major financial crisis in modern history. Like the 1930s Great Depression, the 2008 Great Recession shook political and social arenas. From socio-economic policy reforms to popular political mobilisations, advanced capitalist countries underwent important political and institutional reconfigurations. Yet 12 years later, and despite the depth and scale of these initial responses, neoliberal domestic configurations that had been in place since the 1980s withstood in the longer term. Institutional and social responses suggest that the postwar market embeddedness that facilitated unprecedented levels of social and economic welfare in Europe is perhaps now in terminal regression.

Given the historical magnitude of the Great Recession and the responses it occasioned, this study asks: can we empirically establish (a) historical path(s) between the Great Depression in the 1930s and the Great Recession in 2008 amongst the selected Western European countries? Viewed comparatively and being mindful of their longer trajectories, how did they converge or diverge in the run-up to 2008 and how their convergence/divergence explains their institutional response to the crisis? And, can we identify opportunities for significant paradigm-changing reactions from the Western European publics or civil societies?

Recent sociological work has sought to understand 2008 by examining sociodemographic, institutional and attitudinal data (e.g. Hooghe and Quintelier, 2014; Kern et al., 2015; Marien et al., 2010). Much of this scholarly work has arguably paid insufficient attention to the deeper historical embedding of the Great Recession and its political and civil society responses. By contrast, economic historians have examined the Great Recession in light of previous crises (e.g. Bordo, 2018; Kobrak and Wilkins, 2011; Nayak, 2013) but with little attention paid to civil society responses, and thereby also neglecting an important political dimension of the economic crisis. This study broadly draws on these bodies of work but seeks also to make a contribution by using a comparative historical sociological approach to explore three distinct dimensions of the Great Recession. The first is presented in Chapter 4. It positions Western European political elites’ responses to the Great Recession in a historical long-run, in which 2008 is considered in the light of the 1930s and the responses that the Great Depression had occasioned. The second dimension is presented in Chapter 5, which turns the macro-historical comparative lens of the previous chapter to what might be termed a meso-level analysis. Chapter 5 thus presents a comparative examination of Western European states’ political responses according to a regime-typology (the Anglos, the Euros, and the Nordics). Finally, Chapter 6 comparatively examines survey data from the European Social Survey (ESS) to allow reflection on how Western publics responded to these various measures.

Central to this thesis is the retrieval of the comparative historical sociology of Polanyi (1957), Mann (1983; 1993; 2012; 2013), and Esping-Andersen (1990). Drawing from Polanyi, I use his concepts of ‘market embeddedness’ and ‘double movement’ to examine the historical drift from welfarism to today’s neoliberalism; from Mann, I take his comprehensive ideological, economic, military, and political (IEMP) model to dissect the different causal sources of the crisis and the responses to it; and from Esping-Andersen, I employ his ideal-typical classification of modern capitalist welfare states.

Following the introduction, theory, and methods discussion, Chapter 4 traces the broad lineages of the development of welfare states across Western Europe from the beginning of the 20th century and, crucially, as punctuated by the Great Depression. I show that there was a common path-dependent movement towards welfare policies after a series of major historical disruptions, but this was then reversed in the late 1970s in a new iteration of Polanyi’s double movement. Expanding the analysis of such critical juncture, Chapters 5 offers a typology to explore the varying responses to the Great Recession across three geopolitical regions: the liberal Anglos, the conservative Euros, and the social-democratic Nordics. I argue that whilst initial political responses converged in 2008 to follow an expansionary rationale reminiscent of 1930s Keynesian logic, each soon reverted fully to historical form, i.e., the neoliberal logic of austerity and fiscal discipline. More, and based on accompanying analysis of ESS data, I find that Western European publics are deeply mistrusting of democratic institutions and political actors. This supports contemporary views that see liberal democracy under threat (e.g., Runciman, 2018; Applebaum, 2020). Today’s low levels of political trust can be seen as positive feedback reinforcements of the neoliberal pathway Western Europe took in the 1980s, thus suggesting that European publics will not exert pressure for a new socially embedding move as it had partially happened in the 1930s. Yet, also importantly, this reasserts Mann’s (1970) classical argument that liberal democracy’s stability requires apathetic, non-committed publics. On this basis, I conclude that the impacts of the Great Recession are best understood against longer-term historical path-dependent political lineages.