How entrenched is Neoliberal thought in the United States? Consider these examples:
* would you say that the average person has a positive or negative view of unions?
* how close was the United States to privatize social security?
* why, when the US medical system is half as efficient as that of France, Canada, or the UK, does our private health care system continue?
* which is more important - protecting the public interest or protecting Bear Sterns from collapsing?
David Harvey’s work, A Brief History of Neoliberalism (see my notes from his recent visit to UT), examines in depth the history of Neoliberal thought and action, the principles of Neoliberalism, the difference between theory and practice, and a criticism of Neoliberalist practices.
Traits of neoliberalism
First, what is neoliberalism? It is, essentially, a belief that market forces and private property interests are the preferred, most efficient method of managing all economies of scale. That is, “Free Market Above All.” Corollaries include:
- 1. Government intervention is inefficient. Market forces can more efficiently handle traditionally (Keynesian) governmental roles, such as welfare, city services, or pollution (ie, using pollution credits to reduce pollution.)
- 2. Privatization is preferred over public interests. This is echoed in
There is no such thing as society. There are only individual men and women.
— Margaret Thatcher, 1987
Intense privatization is the cornerstone of Neoliberalism. Removing the public aspects of life (unions, public spaces, public welfare) allows private property to become more liquid - thus allowing better control through market forces. And everything - from pollution, to space, to the lawmaking process, can be privatized and marketed.
- 3. Putting together corollary one and two, Neoliberalism advocates the privatization of almost all (save military) government spheres, which dismantles the agency and effectiveness of government programs.
Neoliberalism in practice
In practice, Neoliberalism has several key characteristics:
- 1. Because Neoliberalism concentrates private ownership, public/social forces have to be dismantled. In many cases, this has happened violently and with authoritarian means. The coup d’etat in Chile in 1973 was the first militaristic Neoliberal action, and the US invasion in Iraq and subsequent governmental structure (where every industry, including the military and excepting oil, is private) is simply the latest and most sever form. In the US and UK, Neoliberalism has meant the decline of trade unionism and the removal of public spaces. Authoritarian measures in the US emphasize a strong military and domestic and international espionage.
- 2. Unlike Keynesian policies which encouraged government interventionism to promote economic equality, Neoliberalism concentrates wealth into the upper classes.
- 3. Although Neoliberalism discourages government intervention, policy-makers have not been afraid to use it when it helps their cause. Since 1982, the International Monetary Fund has been co-opted to require Neoliberal development policies in countries (water in Bolivia and Ecuador, telecommunications in Mexico, etc) that take loans from the IMF. In this way, Neoliberal policies are forced onto developing countries which then must pay them back at high interest rates. That is, the rich are feeding off the poor. (For more, see Making Development Geography and Accumulation by Disposession, below.
- 4. Market forces are used for all transactions, including those for which information is not universal (a prerequisite under Adam Smith’s free market theories). Financialization means continually creating new markets and speculations, which encourages unsustainable financial environments while accumulating wealth at the top.
- 5. Deregulation runs rampant and favors those in power. Because social networks are diminished and social power legally removed, cronyism and money replace social power as the means to power in government.
- 6. Neoliberalism, like most forms of capitalism, requires huge deficit spending to continue adequate growth. Crisis must continually be followed by crisis, either real or manufactured, to remove social structures and produce a willing constituency for privatization.
- 7. Democracy itself (the public institution) becomes critically impaired. By removing institutions from government (ie, public) control into private hands, democracy becomes impotent. Ironically, the cries of ‘freedom’ and ‘democracy’ have been used to promote the Neoliberalist agenda.
- 8. Finally, when having to make a choice between repaying public interests or paying the banks - the banks win. Over and over again, Neoliberalism protects financial institutions (the Bear Sterns buyout, anyone?) over public interest.
Accumulation by dispossession
After discussing the rise and history of Neoliberalism, Harvey concludes with two chapters of examples, including one specifically on the embrace of Neoliberalism in China, and the final critique of Neoliberalism’s problems. Neoliberalism, as a theory, is not sustainable except through authoritarian means.
The internal economic and political contradictions of neoliberalization are impossible to contain except through financial crises. So far these have proven locally damaging but globally manageable. The manageability depends, of course, upon departing substantially from neoliberal theory.
– David Harvey
Accumulation by dispossession is the removal of public assets (which many depend on) into private hands in the wealthiest classes. It is managed through three methods:
- 1. Privitization and commodification.
- 2. Financialization.
- 3. The management and manipulation of crises.
- 4. Government redistributions.
Neoliberalism has not generated wealth, but has redistributed upwards, as Harvey claims.
My Thoughts
Harvey’s work is dense, thoughtful, and compelling. He presents his arguments in both the form of a critical geographer while retaining readability or a wider audience. As an entry point into his work, I found it readable while containing the complexity and nuance needed for such a difficult and detailed subject.
My next thoughts, as a geographer, is that of scale - how does Neoliberalism reproduce itself at the local, regional, national scales? What about at the personal scale? What forces interplay to stop (social reproduction?) or reinforce (national discourse?) it? And if Neoliberalism is a global, crisis-enforced phenomenon, what measures can be used to recreate and amplify social constructs?
Something to think about.