>>2864690I used to sympathise with this view but I've come to see it as a set of just-so stories: industry didn't
go anywhere. The UK, the number-one case for deindustrialisation, still produces more
value in manufactured goods than it did in the 1970s/80s. Its output has shrunk as a proportion but not in absolute terms, and on a global scale much of this just comes from moving industry around (which on the whole has been a good thing. 1.5 billion Chinese getting to middle-income level is a world historic miracle, not some tragedy just because it means nobody makes toy cars in Britain anymore.)
The claim that the welfare state has been eroded should be qualified. Welfare structures have been enshittified, sure, but absolute spending levels have generally trended upwards. Attempts at cost control have mostly failed. As regards domestic investment: this varies from country to country, but the single largest importer of investment capital in the world is the United States. The current AI fad would illustrate that it's not
just shares either: A lot of investment is being thrown at physical infrastructure in the form of datacenters etc. (whether you think this is a good idea or not is a different question.)
I'm sceptical of state-capitalist developmentalism as an approach for most countries. The problem is that since state capacity has generally been weakened and the competence of government officials has generally declined, their ability to "beat the market" is weaker than ever. The best realistic scenario I can see is the decentralisation of power to a more local level so that (a) it's easier for leftists to obtain it and (b) each area can experiment and see what works in their specific circumstances or make the trade-offs they desire, and other areas can learn from their experiences.
I think we're going to look back on Neoliberalism, like Keynesianism, as having some beautiful elements that deserved to succeed. As we head for an era of arbitrary prejudice, warmongering, and social protection for capitalists but not for workers, the idea that we were all going to live in a borderless low-tax free trade utopia is going to look more and more appealing in hindsight.
I think where neoliberals went wrong was to get side-tracked on tax cuts instead of doubling down on deregulation and privatisation, leaving the main role of the state being to administer income taxes with negative bands (e.g. zero-extra-admin-cost welfare) for the poor. Which is to be expected because most of their advocates were sociopaths, even if their ideas had a lot of truth in them and a certain respect for human dignity in the abstract.