New political economy: from the “welfare state” to the “social apartheid state”

The transition to an economic policy of high taxes, large government expenditures related to developing infrastructure and implementing social programs means the construction of a “welfare state”. Tax cuts, market liberalization, and the privatization of part of the public sector are usually associated with the neoliberal state. Achievements of scientific and technological revolution, together with exogenous shocks of the 1970s (energy crisis and the collapse of the Bretton Woods system), led to the economic collapse of the welfare state. Most rich countries have undergone a transition to neoliberalism, accompanied by fragmentation and reduction in the share of the middle class. These processes have led to the replacement of stable democratic majorities with situational coalitions of minorities formed on most important political issues. The global 2008–2009 financial crisis is interpreted by many economists as a collapse of neoliberal economic policy. However, unlike the crisis of the 1970s, which led to the rejection of the welfare state, and the crisis of 1989–1992, which led to the rejection of Marxism in most former socialist countries, neoliberalism has not been rejected. Criticism of neoliberalism has become respectable, the authorities have stopped using the old rhetoric, but in the economic policy of most countries everything remains outwardly the same. At the same time, a number of phenomena in the modern economy suggest that much is changing, but economists cannot notice it due to the “blind spot” effect. Segregation processes are unfolding in the 21st century. Racism based on biological characteristics is considered immoral. However, the practices of social racism, which lead to a sharp slowdown in both vertical and horizontal mobility, while accelerating the processes of social differentiation of society, are tacitly approved by many social groups. New political economy is a discipline that allows us to characterize and analyze these processes. The practices of social segregation are becoming more widespread, but they do not exist in the economic mainstream, as well as in the official political discourse.

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