Neoliberalism - the doctrine that market exchange is an ethic in itself, capable of acting as a guide for all human action - has become dominant in both thought and practice throughout much of the world since 1970 or so. Its spread has depended upon a reconstitution of state powers such that privatization, finance, and market processes are emphasized. State interventions in the economy are minimized, while the obligations of the state to provide for the welfare of its citizens are diminished. David Harvey, author of 'The New Imperialism' and 'The Condition of Postmodernity', here tells the political-economic story of where neoliberalization came from and how it proliferated on the world stage. While Thatcher and Reagan are often cited as primary authors of this neoliberal turn, Harvey shows how a complex of forces, from Chile to China and from New York City to Mexico City, have also played their part. In addition he explores the continuities and contrasts between neoliberalism of the Clinton sort and the recent turn towards neoconservative imperialism of George W. Bush. Finally, through critical engagement with this history, Harvey constructs a framework not only for analyzing the political and economic dangers that now surround us, but also for assessing the prospects for the more socially just alternatives being advocated by many oppositional movements.
I was a little bit afraid that this book would be filled with economic jargon, but I found it quite readable. I got a little bit lost in his discussions about China, as I'm just not familiar enough with macro-economic theories to understand exactly how neo-liberalism would play out there. I was also hoping for an epilogue or an updated prologue with information about the 2008 economic crisis in the US, which seemed to conform to Harvey's predictions. Harvey shines in his analysis of the UK and US situations and I was glad to see that he included a fair amount of information on Latin America as well, as it often seems to be a laboratory for economic theories.
This book asks some profoundly troubling but very necessary questions about our conceptions of freedom and democracy.
According to Harvey, after the end of World War II, the social democracies of Western Europe were dominated by what he calls "embedded liberalism," an amalgam of "state, market, and democratic institutions to guarantee peace, inclusion, well-being, and stability," and which was marked by the regulation of free trade and the belief that full employment and the social welfare of the citizenry were at the heart of a healthy economy." The postwar economies that operated under embedded liberalism saw gradual growth and prosperity throughout the 1950s and 1960s, but eventually began to falter under a new set of emergent economic ideas.
During the late 1970s and early 1980s in China, England, and the United States, the shift away from policy finally began to catch up to the growing disenchantment among elites with embedded liberalism. The markers on the way to a final transition were obvious: in 1973, a U.S.-led coup in Chile in which we provided the economic minds to completely deregulate Allende's social-democratic system and install a fascist who respected no boundary between the state and the corporation; in 1979, a total restructuring of U.S. monetary policy under the direction of Paul Volcker (who still rears his head in policy-making decisions three decades later); and soon afterward the elections of Margaret Thatcher and Ronald Reagan. The changes, too, were just as apparent: the increasing amounts of deregulation in private enterprise, the investment of capital in foreign economies, and the promotion of a regressive tax structure in which the super-rich pay the same percentage in taxes as the poor.
Harvey explicitly makes two arguments about the pervasive growth of neoliberalism: 1) some of the ways in which it is practiced making it a veritable contradiction in terms, and 2) neoliberalism has successfully rebuilt and sustained a lasting class differential and formation of capitalist class power which the working poor and middle classes have to continually fund. First, while one of the main tenets of the neoliberalism is to keep state interference in the economy to an absolute minimum, it turns out that the state conveniently intervenes when it is in the best interest of economic elites who run the system (see Paul Bremer's opening up of the Iraqi economy and banking system to foreign investment and business, as well as the aforementioned United States intervention in Chile). Secondly, the idea of continued and increased economic growth is a shibboleth. Aggregate growth rates after the inception of neoliberalism - which declined from 3.5% in the 1960s to a current approximate 1% after 2000 - show it to be less and less a set of economic policies which actually produce wealth in an egalitarian manner. While a formation of an ultra-rich capitalist class would have been unheard of in socialist China or Russia forty years ago, the vastly uneven distributions of wealth have allowed for exactly that.
One of the most interesting parts of the book is when Harvey discussed neoliberalism is when he talks about how the concept of "freedom" is deployed to rhetorically shore it up. Whenever you hear neoliberal policies discussed by politicians, you always hear about how open markets create more "freedom," which Harvey does not admit is true, at least in a sense. What he does emphasize is that it excludes other notions of freedom, such as access to a wide array of social services, the ability to collectively negotiate for wages, and appropriate working conditions.
This comes highly recommended for anyone interested in left-wing politics, criticism of the economic policies of international institutions (especially the International Monetary Fund and World Bank), and an answer to laissez-faire capitalism broadly speaking.
their dominance by re-distributing wealth back to themselves at a level approaching that of the 1920's. Globalization,privatization of publicly owned assets he sees as vehicles which have brought about that re-distribution.
His argument here relates to his writing in his other works, where he sees
a rolling crisis within capitalism and so for everyone involved. With others he relates this to the 'over-accumulation' of productive capacity,including investment in china.
If you’re wondering how government got so caught up in the well-being of Wall Street, I have a book for you: A Brief History of Neoliberalism by David Harvey. I had a basic understanding of what neoliberalism is, and have sometimes winced at how
In the 1970s, businesses and financial institutions began to organize themselves to fight for their interests. They did so through making existing organizations like the US Chamber of Commerce more powerfully political in furthering their mission. Even the Nobel Committee got into the act, recognizing American economists who have put their stamp our world through their talismanic belief in the wisdom of markets. (Though we tend to see Sweden as a socialist worker’s paradise, Sweden has a traditionally powerful wealthy class that wields influence in high places and wanted to dethrone post-Keynesianism.) They built entire financial industries and financialized existing industries that capitalized on distrust of government and America’s traditional reverence toward individual rights. They were able to refashion the state’s purpose: rather than provide social welfare programs, it should create healthy conditions for businesses to thrive, which should in turn would trickle down to benefit society, though that’s proven less reliable than the trickles of springs that people in Puerto Rico rely on for drinking water right now. So many of our current debates – health care, infrastructure, environmental protection, creating jobs that pay enough to live on – were illuminated for me by this accessible and informative book.