The crisis of US neoliberalism and the risk of current economic stagflation

Abstract

Purpose – Since the outbreak of COVID-19, tremendous changes have taken place in the US economy – the economic growth in the whole year of 2020 was negative, and though it enjoyed a significant rebound for the first half of 2021, the growth rate began to decline rapidly by the third quarter, and inflation suddenly rises rapidly, which after came the all-time highs of the “misery index” consisted of the inflation rate and unemployment rate. All signs indicate that the US economy will likely enter a “stagflation” crisis. Design/methodology/approach – This paper analyzes the institutional and social contradictions in the United States during the neoliberal era from the perspectives of domestic social structure of accumulation (SSA) and international SSA based on the SSA theory. Findings – The current risk of stagflation in the US economy is a concentrated outbreak of the long-term accumulated contradictions in neoliberal SSA under the impact of the epidemic, which is the product of the irreconcilable contradictions inherent in the capitalist mode of production. Originality/value – Based on this analysis, the paper points out that with the deepening of the crisis, the neoliberal SSA is likely to end and a new SSA will be established gradually.

Keywords

• US economy
• Stagflation
• Neoliberalism
• Social structure of accumulation theory