Does Europe need neoliberal reforms?

This paper examines the neoliberal claim that the only way toachieve sustainable growth and full employment is to abandonKeynesian macroeconomic management and the welfare state andbring back ‘flexible labour market policies’. Itsummarises the conditions required for neoliberal policies toproduce such an outcome and their relevance to contemporaryeconomic, social and political realities. This is followed byan empirical comparison of the economic performance and socialwell-being of seven advanced economies, widely regarded as leadingproponents of the three models of capitalism: liberal, corporatistand social democratic. Contrary to the claim, the model thatperforms best is the one that has least in common with the neoliberaleconomic orthodoxy – a conclusion that is likely to beof particular relevance in the present century.