In a recent post on the concession of failure by Czech free-marketeer Vaclav Klaus, I made the bald assertion that the neoliberal program has failed in New Zealand, the United Kingdom, Eastern Europe and, most recently, in its heartland, the United States. Naturally, the comment thread was full of challenges and queries. No-one had the nerve to challenge my judgement on New Zealand, but the others were controversial. Ken Parish raised questions about the US. John Ray asked about the view, which he attributes to discredited Blair spin-doctor Peter Manderson that ‘we are all Thatcherites now” And someone with the imaginative pseudonym ‘Anonymous’ asked the question on everyone’s lips ‘What about Estonia?’.
To start with the last question first, I don’t claim to be an expert on Estonia, though I know that it has pursued a more free-market policy than other Eastern European countries. A quick Google search reveals the news that Unemployment in Estonia reached 14.2 percent in the first quarter, up by 0.6 percent year-on-year. More to the point, Estonia, like the Czech Republic, is lining up to join the European Union. As Vaclav Klaus notes, this means signing up for the EU social charter and becoming a social democracy. Anonymous and others can live in hope that EU enlargement will trip over the various obstacles in its path (Cyprus) or that the voters of Estonia will prefer free-market ideology to European citizenship, but I think its safe to say that Estonian neoliberalism is on its deathbed.
As regards the UK, I have pointed out on a number of occasions that, while Tony Blair came to office advocating a version of the Third Way that amounted to little more than “Thatcherism with a human face”, his government has gradually reverted to traditional social democracy, raising taxes in the last budget and, more recently, breaking the taboo against mentioning redistribution. All that is left of the Third Way is the Public Finance Initiative, and this sorry excuse for a public investment policy cannot last much longer.
Finally, there is the United States. A couple of years ago, when the unemployment rate there was 3.9 per cent, I observed that the debate between social democracy and neoliberalism turned on whether this exceptionally good performance could be sustained. This question has been resolved in the negative. Even assuming a sustained recovery in the US (most unlikely in my view), it is now clear that there is little if any payoff, in terms of employment and social mobility, for the massive inequality and poverty generated by neoliberalism in the US.

Update My view that Blair’s Third Way is dead is developed further here, here, and here, and has been endorsed by publications as disparate as The Guardian and The Telegraph. I couldn’t find a really good link for the Telegraph, but this interview with the self-described “last Blairite in the Cabinet” indicates the prevalence of the view I’ve been putting since the middle of 2001.