The crisis comes first
The starting point is not theory but reality. The neoliberal system that has dominated much of the world since the 1980s is now delivering instability, inequality, and institutional breakdown rather than prosperity and security. Housing has become unaffordable, essential services overstretched, public trust eroded, and governments increasingly incapable of managing crises that arrive simultaneously rather than sequentially: pandemics, climate shocks, supply-chain disruptions, geopolitical conflict, and demographic ageing.
This is not accidental. As I have argued here, neoliberalism was a deliberate ideological project built on the idea that markets would self-optimise and that shrinking the state would enhance freedom (Friedrich Hayek and Miton Friedman). Instead, as Richard Murphy has argued, it hollowed out public capacity, enabled rent extraction, and concentrated wealth and power. The result is a system that works for asset owners and monopolies but leaves growing parts of society economically insecure and politically alienated.
History is unambiguous on one point: extreme and persistent inequality does not end quietly. When peaceful correction mechanisms fail, societies eventually move toward unrest, coercion, or authoritarian “solutions”. Avoiding that outcome is not about being nicer; it is about managing risk. Care economies should be understood in that context: not as moral idealism, but as a practical way out of a system that is visibly failing.
What care economies are
A care economy treats care as core economic infrastructure rather than a residual welfare activity or a private family burden. It recognises that productive economies depend on healthy, educated, secure people across the life course.
In practical terms, care economies share several characteristics:
- Care as infrastructure: sustained investment in childcare, healthcare, aged care, disability support, education, and community services, planned with the same seriousness as transport or energy systems.
- Universalism with targeting: services are broadly accessible so the middle class uses and defends them, while additional support is directed to those with higher needs.
- Decent care work: fair pay, training pathways, professional recognition, and ethical migration settings aligned with workforce needs.
- Prevention and resilience: shifting spending upstream to reduce downstream crisis costs, whether in health, social services, or justice systems.
- Guardrailed markets: private provision may exist, but strong regulation prevents rent extraction and quality degradation.
- Democratic accountability: transparency, enforceable standards, and user and worker voice.
This is not about replacing markets with the state. It is about re-embedding markets within social and institutional frameworks that sustain long-term stability.
Post-WWII Europe and the Scandinavian exception
After World War II, much of Western Europe built welfare-state systems that linked reconstruction, social security, and democratic legitimacy. These systems were not acts of altruism; they were political settlements designed to prevent the social breakdowns that had fuelled extremism in the interwar years.
Scandinavia – Sweden, Denmark, Norway, and Finland – largely held on to this social-democratic settlement. High taxation was accepted as the price of security; care services were treated as universal public goods; labour markets were coordinated; and trust in institutions remained comparatively high. These countries can legitimately be described as care economies, albeit ones now under pressure from ageing populations, migration politics, and global economic change.
Elsewhere, particularly in the US and UK, this model was progressively dismantled from the 1980s onward in favour of neoliberal market primacy.
The USA as a warning, not a model
The United States is now the clearest illustration of what neoliberal collapse looks like in practice:
- Marketisation of essential services, especially healthcare, has produced high costs and deep insecurity.
- Asset-driven inequality has entrenched class divides.
- Public institutions have lost capacity, while political polarisation has reached existential levels.
Crucially, the US case shows that neoliberal collapse does not automatically produce a more caring or equitable society. Instead, it often fuels populism, institutional sabotage, and an erosion of democratic norms. This is why allies increasingly view the US trajectory as something to avoid, not emulate. It is a warning label for late-stage neoliberalism.
Japan: care by necessity, not ideology
Japan offers a different lesson. It did not move toward care economics out of progressive ideology but out of demographic necessity. Rapid ageing forced large-scale investment in aged care, long-term care insurance, and community-based support systems. Technology was deployed to supplement care provision, and social systems adapted to new realities.
Japan demonstrates that care economies can emerge pragmatically, even in conservative political cultures, when demographic and social risks become unavoidable. Care, in this sense, is not a moral luxury but a structural requirement.
Early shifts elsewhere
Beyond Scandinavia and Japan, we see partial care-economy pivots:
- Canada framing care infrastructure as national economic strategy, particularly in childcare and social resilience.
- New Zealand’s wellbeing budgeting reframing what governments measure as success.
- Parts of Europe linking care provision to workforce participation, social cohesion, and economic resilience.
These are not full transformations, but they are signals that the neoliberal consensus is breaking and alternatives are being tested.
Australia’s unique moment
Australia is unusually well positioned at this point in time. It has:
- a Labor government open to care-economy thinking
- an opposition too weak to drive sustained polarisation
- a political culture that has not yet normalised institutional sabotage
Demographic pressures in aged care, health, and disability support make reform unavoidable rather than optional.
This window will not stay open indefinitely. If care-economy reforms remain incremental or rhetorical, Australia could still drift toward the same populist dynamics seen elsewhere. But if used strategically, Australia could become a credible example that care economics improves stability, productivity, and social trust.
Momentum or thin hope?
At present, global momentum toward care economies is fragile:
- agreement in principle is widespread
- resistance emerges when reforms threaten entrenched privileges, tax concessions, or asset-based wealth
Middle and upper classes often support care until it requires redistribution.
Yet countervailing forces are growing: ageing populations, labour shortages, climate risk, and crisis frequency make care infrastructure increasingly indispensable. The US experience acts as a deterrent, showing where unmanaged inequality and institutional decay lead.
My assessment is that this is still a thin thread of hope – but one that can be strengthened through coordination.
Like-minded countries and Canadian leadership
This is where collaboration among like-minded democracies becomes critical. No single country can carry the political and economic cost of transition alone. Coordinated movement reduces exposure and builds legitimacy.
Here, Canadian leadership matters. In his Davos speech, Mark Carney explicitly acknowledged that the old order is no longer working “as advertised” and that resilience, not market purity, must guide policy. Canada, as a middle power with credibility across Europe and the Anglosphere, is well placed to convene an international governmental dialogue on care economies.
Such a gathering should be practical, not declaratory:
- exchanging evidence on care-economy policies that work
- sharing lessons from Scandinavia, including emerging threats
- aligning workforce strategies and ethical migration frameworks
- developing shared metrics for care access, quality, and resilience
This is not about ideology. It is about risk management and system stability.
The core political message
The strongest argument for care economies is not that they are kinder, but that they are safer. Extreme inequality and social precarity eventually produce chaos. Care economies are the democratic alternative to that endpoint: a way to rebuild resilience before crisis forces change under far worse conditions.
If neoliberalism’s collapse is inevitable, the choice is not between markets and care. It is between care-based resilience and coercive instability. The task now is to turn a thin thread of hope into coordinated action before history makes the decision for us.
Paul Budde