The normalizing role of rationalist assumptions in the institutional embedding of neoliberalism.

The political economy of Britain over the past three decades provides an interesting example of the consolidation, normalization and institutionalization of a new economic paradigm - neoliberalism. As such, it serves as a potentially instructive focus for debate both about the conditions under which economic paradigms are replaced and consolidated and the evolution of such paradigms through the process of institutionalization. In this paper I suggest that the institutionalization of this new economic paradigm has been associated with the shift from a normative to a normalized and necessitarian neoliberalism. I examine the role played by rationalist assumptions in this extended process of normalization-institutionalization. After presenting a stylized account of the evolution of British neoliberalism, I show how New Labour's monetary policy regime is the heir to the legacy of monetarism and its agenda of labour-market reform is the heir to Thatcherism's supply-side economics. I suggest that the time-inconsistency thesis and the business school globalization thesis have played an equivalent role, for New Labour, to that played for the new right by monetarism and supply-side economics in legitimating neoliberalism. In this way neoliberalism has been normalized. In the final sections of the paper I reflect on the implications of the normalized and necessitarian character of neoliberalism in Britain for its contestability and for democratic economic governance more broadly. [ABSTRACT FROM AUTHOR]