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A Brief History of Neoliberalism is a 2005 book by British economic geographer
Structure
The book is split into seven chapters.[3][4]
- Chapter one ("Freedom's Just Another Word...") argues that neoliberalism is a ploy by global elites to retain power and extend capital.
- Chapters two ("The Construction of Consent") discusses how neoliberalism rose to political prominence, particularly in the United States and the United Kingdom.
- Chapter three ("The Neoliberal State") examines the role of the state within neoliberalism.
- Chapters four ("Uneven Geographic Developments") discusses the rise and effects of neoliberalism in several countries.
- Chapter five ("Neoliberalism 'with Chinese Characteristics'") discusses neoliberalism in China.
- Chapter six ("Neoliberalism on Trial") investigates the global effects of neoliberalism.
- Chapter seven ("Freedom's Prospect") examines public opposition to neoliberalism.
Summary
"It has been part of the genius of neoliberal theory to provide a benevolnet mask full of wonderful-sounding words like
rights, to hide the grim realities of the restoration or reconstitution of naked class power."[3]: 119
Harvey characterizes '
Neoliberal policies, in Harvey's view, center around four focuses: the
The political rise of neoliberalism
Harvey argues that neoliberalism arose as a concerted effort by the "capitalist classes" to consolidate economic power. This effort was disguised in an ideology claiming to promote "individual freedoms", and advanced by corporations, the media, think tanks, universities, local institutions like schools, churches, and professional associations, and eventually national governments.[3]: 40 According to Harvey, neoliberal power emerged gradually, slowly penetrating cultural ideas of "common sense" and establishing itself as a "natural" way for society to be organized.[3]: 41
Harvey argues that the political climate in the early 1970s was one that viewed powerful corporations, in alliance with interventionist states, as oppressive and overly powerful; popular consensus demanded greater
The United States
Harvey pins the earliest moment of neoliberalism's political rise in the
Harvey notes that the Chamber quickly expanded its base from 60,000 firms in 1972 to over a 250,000 by 1982. Along with the
According to Harvey, businesses acted to capture the Republican Party through an aggressive campaign of donations. This led to the further consolidation of business interests into a unified force, as they had to build alliances to extend their influence beyond the $5000 limit on PAC donations. To retain electoral force, business interests allied themselves with the Christian right, positioning their ills as arising not from capitalism and the "neoliberalization" of culture but from excessive state power (controlled by "liberal elites") that was being used to benefit particular groups (e.g. blacks, women, and environmentalists) at their expense. Harvey argues that the Democratic Party posed little opposition, as it needed to placate corporate and financial interests to maintain funding.[3]: 48–49
Harvey notes that neoliberal ideas ultimately found significant political influence with the
New York City
Harvey places particular emphasis on the management of
Harvey outlines how, after a city budget crisis in the 1970s, a bail-out was constructed which attached requirements that amounted to a "coup by the financial institutions against the democratically elected government". These included curbs to municipal unions, cutbacks to social provisions, and austerity measures. Harvey argues that this resulted in a redistribution of wealth from the lower classes to the upper classes, a decrease in the power of workers, and a deterioration to public infrastructure. Furthermore, Harvey maintains that financial institutions "seized the opportunity to restructure" the city by developing a good "business climate", which involved using public resources to build infrastructure for business, providing subsidies and tax breaks to businesses, and restructuring the city around finance.[3]: 45–47
The United Kingdom
The neoliberal state
Harvey contends that the neoliberal state positions itself as an arbiter of individual freedom, favoring "strong individual property rights, the rule of law...the institution of freely functioning markets and free trade...[and] a legal framework...of freely negotiated contractual obligations between juridical individuals in the marketplace"[3]: 64 as the institutional arrangements to ensure this. However, he believes this is only a "hijack[ing]" of the "ideas of individual freedom to a class project of market freedom and capital accumulation". In practice, the state produces legislation and regulatory frameworks that are advantageous to corporations—sometimes even allowing corporations to draft legislation—which results in the "restoration of class power" to capital.[3]: 79 This diminishes the power of labor, and the working class becomes increasingly impoverished. He argues that an increasingly large police state must be established to "deal with the problems arising among discarded workers and marginalized populations".[3]: 77 He also argues that neoliberalism is distrustful of democracy because popular majorities are liable to restrict individual or minority freedoms or encroach on the free market; he argues neoliberals instead prefer "governance by experts and elites".[3]: 65
Instability and contradictions
Harvey believes that the neoliberal state is inherently unstable.[3]: 81 For instance, he believes neoliberalism promotes unbridled individualism ("There is no such thing as society but only individuals," as Margaret Thatcher put it), which he argues breaks down bonds of social solidarity.[3]: 82 Furthermore, he argues that there are a number of contradictions at the heart of neoliberalism.[3]: 67–70 First, monopolies sometimes arise naturally within competitive economies, leading not only to economic inefficiencies but also potentially to exploitation. Second, modern economics recognizes that there are a number of market failures, which he argues the neoliberal aversion to state intervention cannot adequately address. Third, imperfect information is pervasive in markets and can lead to power imbalances. Fourth, neoliberalism fetishizes technological change, which can be destabilizing. Finally, the individual freedom that neoliberalism supposedly holds sacred can lead to strong collective organizations that threaten neoliberal values, and thus neoliberals must resort to strong state intervention to prevent them—thereby utilizing the very forces they condemn. He also argues that neoliberal rhetoric hailing the market as the arbiter of competition and fairness is "negated by the fact of the extraordinary monopolization, centralization, and internationalization of corporate and financial power".[3]: 203
Relation to neoconservatism
"There is a far, far nobler prospect of freedom to be won than that which neoliberalism preaches. There is a far, far worthier system of governance to be constructed than that which neoconservatism allows."[3]: 206
Harvey suggests that
Geographic development
Harvey notes that neoliberal reform followed a general trend of being "gradually but unevenly put in place during the 1980s and consolidated during the 1990s".
Harvey identifies four components of neoliberal development, which he believes is embodied by the
Harvey spends the bulk of chapters four and five discussing the political development of neoliberalism in Mexico, Argentina, South Korea, Sweden, and China.
Mexico
The
Shortly after declaring bankruptcy,
In 1989 Mexico agreed to a partial
In sum, Harvey argues that these years of neoliberal reform amounted to an "attack on labour, on the peasantry, and on the standard of living", and maintains that these reforms led to the entrenchment of elite class power, as a small group of magnates (both in Mexico and out of Mexico) accumulated significant wealth while the rest of Mexico suffered.[3]: 98–104
Argentina
Under
In 1992 the Mexican
Harvey argues that following this, neoliberal policies once again enabled the economic power of
South Korea
Harvey traces the economic history of South Korea from 1950 onward, and argues that the economic successes of the country—which he argues was largely the result of state industrial policy—enabled the capitalist classes to begin a period of neoliberalization beginning in the mid 1980s.
Harvey tells the story like this: under the authoritarian rule of Park Chung Hee, the country (which was still "essentially agrarian" in 1960) began a process of export-oriented industrialization.[3]: 107 The state encouraged industrial capitalists to develop factories and conduct business by allowing them to enrich themselves in the process, and continued to encourage them by tapping into government savings, supporting access to foreign markets (particularly the United States) and partnerships with Japanese firms, and encouraging their companies to merger into chaebols. As the chaebols grew and acquired greater power within society, they created an "ever more wealthy domestic capitalist class", enabling them to push for neoliberal reforms that benefited themselves.[3]: 204 This included reducing regulations, pushing for easier access to credit from Korean national banks, and off-shoring production to foreign countries like China.
Sweden
China
Deng focused on "four modernizations": in agriculture, industry, education, and science and defense.(120) Harvey recalls that these "strove to bring market forces to bear internally within the Chinese economy."(120) He states that the "spectacular emergence of China as a global economic power after 1980 was in part an unintended consequence of the neoliberal turn in the advanced capitalist world."(121)
Accumulation by dispossession
Harvey argues that the "substantive achievement" of neoliberalism has been the redistribution of wealth from the lower classes to the upper classes. He calls the mechanism by which this occurs "accumulation by dispossession", and he identifies four main features of this process:[3]: 160–165
- Privatization and commodification: Harvey argues that the "neoliberal project" has sought to warfare). Harvey maintains that this amounts to a "transfer of assets from the public and popular realms to the private and class-privileged domains."
- Financialization: Harvey alleges that the financial industry after 1980 allowed the financial system to become "one of the main centres of [upward] redistributive activity through speculation, predation, fraud, and thievery."
- Management and manipulation of crises: Harvey contends that debt crises were deliberately orchestrated in developing countries to allow the redistribution of assets to foreign owners. He suggests that after debt crises reduce the value of assets, neoliberal reforms (promoted largely through structural adjustment programs administered by international organizations) open them up to foreign ownership. He argues that states and international organizations fine-tune this process, stating: "One of the prime functions of state interventions and of international institutions is to control crises and devaluations in ways that permit accumulation by dispossession to occur without sparking a general collapse or popular revolt".
- State redistribution: Harvey claims that "the state, once neoliberalized, becomes a prime agent of redistributive policies, reversing the flow from upper to lower classes that had occurred during the era of tax code.
Effects
"One persistent fact within [the] complex history...of neoliberalization has been the universal tendency to increase
marginalization...The incredible concentrations of wealth and power that now exist in the upper echelons of capitalism have not been seen since the 1920s. The flow of tribute into the world's major financial centres have been astonishing."[3]: 119
Harvey argues that while neoliberal policies successfully brought
Harvey argues that the worldwide financialization promoted by neoliberalism acted as capital flows from developing countries to developed one.(citation needed) He also argues that it increases the chances national economic crises blow up into regional or global ones (what he calls "contagious crises"), citing the
Harvey asserts that while "neoliberal state policies with respect to the environment have...been geographically uneven and temporally unstable", they have on the whole had a negative effect on the
: 172–175Harvey argues that neoliberalism "debases" the concept of
Harvey addresses why it is he believes there is considerable praise for neoliberalism despite what he views as clear evidence it has been harmful. He identifies two primary reasons. First, he notes that uneven geographic development has allowed some areas to see "spectacular"
Reception
The book has been praised for its survey of the development of neoliberalism. John Schwarzmantel, writing in the journal
It has also been criticized for not placing enough focus on the development of neoliberal ideas. John Schwarzmantel, writing in the journal Contemporary Political Theory, notes that "Harvey does not give an extended analysis of the ideas of neoliberalism".[5] Eric P. Perramond, writing in the journal The Professional Geographer, states that "little treatment is given to the changes between nineteenth- and late twentieth-century liberalism".[4]
Criticism
The book has been called a one-sided Marxist analysis. Ritzer Grey, writing in the American Journal of Sociology, alleges that Harvey's "neo-Marxian analysis" does not provide a "balanced appraisal of neoliberalism".[1] Michael J. Thompson, writing in the magazine Dissent, notes that the book "deviates little" from Harvey's "enduring perspective...which echoes orthodox Marxism".[2]
Further Reading
- For a short summary of neoliberalism: Steger, Manfred B.; Roy, Ravi K. Neoliberalism: A Very Short Introduction. Oxford University Press. ISBN 9780199560516.
- For a survey of the intellectual development of neoliberalism[7]: Jones, Daniel Steadman (2012). Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics. Princeton University Press. ISBN 978-0-691-15157-1.
- For a survey of early neoliberal thought and debateISBN 978-0-674-03318-4.
- For a favorable analysis of neoliberalism[9]: Yergin, Daniel; Stanislaw, Joseph (1998). The Commanding Heights: The Battle for the World Economy. Free Press. ISBN 978-0684835693.
- For a non-Marxist critique of neoliberalism: Brown, Wendy (2015). Undoing the Demos: Neoliberalism's Stealth Revolution. Zone Books. ISBN 978-1935408536.
References
- ^ a b Ritzer, Georgy (July 2007). "A Brief History of Neoliberalism". American Journal of Sociology. 113 (1). Retrieved 24 July 2019.
- ^ a b c Thompson, Michael J. (Winter 2005). "A Brief History of Neoliberalism". Dissent. Retrieved 25 July 2019.
- ^ ISBN 978-0-19-928326-2.
- ^ a b c Perramond, Eric P. (13 May 2010). "Book Reviews: A Brief History of Neoliberalism". The Professional Geographer. 58 (3): 356–357. Retrieved 24 July 2019.
- ^ a b c Schwarzmantel, John (May 2007). "A Brief History of Neoliberalism". Contemporary Political Theory. 6 (2): 262–264. Retrieved 24 July 2019.
- ISBN 978-0-691-15157-1.
- ^ "Masters of the Universe". Kirkus Reviews. 14 July 2012. Retrieved 24 July 2019.
- ^ "The Road from Mont Pèlerin". Harvard University Press. Retrieved 30 July 2019.
- ^ Shenk, Timothy (Fall 2013). "The Long Shadow of Mont Pelerin". Dissent. Retrieved 14 August 2019.