State Economic and Social Policy in Global Capitalism

Across the capitalist world in countries of varying levels of development, the 1980s and 1990s witnessed a retreat of the state from intervention in the economy reversing a trend that dates back to the Great Depression. In the advanced capitalist countries, countries led by parties of varying political colors privatized state enterprises, reduced state regulations, liberalized capital markets, and, to varying degrees, cut welfare state entitlements. In the Latin American and Caribbean economies, as in much of the rest of the less developed world, countries turned from import substitution industrialization (ISI) with high tariffs, capital market regulation, and high levels of state intervention to neo-liberal open, export oriented models. The dominant interpretation among political and journalistic observers has been that trends toward greater reliance on the market were both products and manifestations of Òglobalization,Ó the increasing economic openness of the national economies and integration of the world economy. The academic version of this view, the "hyperglobalization thesis", argues that the emergence of a single global market and global competition has eliminated the political latitude for action of national states an