Abstract
If we live in a postmodern world where the grand narratives of history have gone into terminal crisis, there is a bit of a problem. One could easily make the case that never before has one discourse so dominated the thinking of so many political traditions. With minor embellishments, one group of ideas has won adherents ranging from the centre left to the far right. Dictators and democrats alike are committed to the programmes forged under conditions of its overweening dominance. There are no serious alternatives, nor can there be. Neoliberalism is the master narrative of the early 21st century. David Harvey, however, is not one to be taken in by neoliberalism. As one of the small group of scholars who has kept the Marxist flame burning in academia, this small book sets out to dissect neoliberalism's claims and show its baleful influence on the world.
The Brief History is ideology critique and a critique of political economy. Harvey's account defines the chief contours of the theory, examines neoliberalism's origins and spread, the characteristics of the neoliberal state, assesses its record in terms of its devastating social effects, and crucially, as a regime of capital accumulation. By way of a working definition, Harvey holds neoliberalism as ‘a theory of political economic practices that proposes that human well-being can best be advanced by liberating entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices’ (p. 2). In neoliberal theory, the market is held to be sacrosanct: millions of simultaneous transactions combine to become greater than the sum of its parts. Buying and selling are the circuits by which information is processed to ensure the whole economic metabolism runs smoothly. The state however must be strictly disciplined. As a political entity standing apart from the economy it is insensitive to price signals and largely immune to market discipline. Should it overstep its role as guarantor of property rights and midwife to new markets there is every danger of unbalancing the market's equilibrium and bringing about a whole series of economic problems.
Neoliberalism as a semi-coherent body of thought was articulated under the auspices of the Mont Pelerin Society, a small and exclusive club of academics founded by Friedrich von Hayek in 1947 and brought together the likes of Milton Friedman, Ludwig Von Moses, and Karl Popper. From here, an interlocking network of intellectual and activist/PR cadres distributed across think tanks, campuses, and voluntary organisations was patiently built up until they began exerting an influence over policy from the mid 1970s in the USA. At this time the ‘embedded liberalism’ (Keynesian mixed economies) of the post-war years went into crisis. The regulatory mechanisms were perceived to be a break on capital accumulation, growing inflation posed a threat to profits, and the share of national income accruing to capitalist elites was in long-term decline. But most dangerous of all embedded liberalism sowed the conditions for a number of popular forces – the labour movement, new social movements – that constituted a potential political threat to ruling class privilege. The advantage of neoliberalism was its proven track record in buttressing class divisions. After the 1973 coup in Chile, Harvey shows how the whole country acted as a laboratory for its prescriptions. Nationalised industries were privatised as was social security, industry (particularly resource extraction) deregulated, and barriers to foreign direct investment lifted. After an initial burst economic growth had halted by 1982, but neoliberalism was a success in terms of restoring profitability and securing ruling class power by distributing wealth from the poor to the rich. The Thatcher and Reagan governments enthusiastically embraced this agenda, establishing a pattern that was to recur in country after country. Privatisation, tax cuts, deregulation, cuts in social expenditure, privileging of finance capital, and union-busting/tight regulation of labour markets are the political common sense of our day.
What has neoliberalism managed to achieve? Has it lived up to the hype of its adherents? For Harvey, the answer has to be an emphatic no. For example, neoliberal rhetoric complains that if business were freed of the burden of excessive regulation economic growth would take off. Well, after two decades of neoliberal medicine Harvey notes aggregate global growth rates for the ‘Keynesian’ 60s and 70s stood at 3.5 and 2.4 percent respectively as compared to 1.4 percent for the 80s and 1.1 percent in the 1990s. There has been an appreciable decline in the rate of economic growth, which is thrown into sharp relief when the main drivers of growth – south-east Asia and particularly China – still tend to favour state-led models of development! Then there has been the change in the way capital has been accumulated. Profits have been fuelled by a new wave of enclosures, characterised by the sorts of cuts/privatisation policies pursued by neoliberal governments everywhere. In Harvey's argument, the expansion of wage labour, that is productivity-led economic growth, has been largely absent. Capitalism has taken to consuming the very social relations that sustained it in the recent past – this is accumulation by dispossession.
Neoliberalism has also affected the forms of opposition it faces. As it has taken over the championing of the individual against the state, it is not too surprising that opposition to the erosion of the global commons assumes the garb of individual human rights. Without wanting to dismiss struggles that utilise this discourse, Harvey argues they accept the parameters neoliberalism sets out for them. With the burgeoning Non-Governmental Organisation sector in mind struggle has become largely synonymous with legal petitions to executive and judicial centres of power. Utilisation of/pressure on existing democratic institutions is not pursued with as much vigour. The mobilisation of the disaffected around collective rights and the creation of new social solidarities are not on the agenda. The NGO represents a constituency, albeit at a social distance – NGOs do not have the same relationship to those it speaks for as political parties, trade unions, and other forms of social movement organisation.
In summary, neoliberalism may be the favoured ideology of capital run riot on a global scale. But it is not a viable strategy for capital accumulation in the long term. We have seen in recent times the beginnings of the onset of a global credit crunch and how this has forced the UK government to nationalise one bank. This hardly heralds a global return to the Keynesian consensus, but more state intervention into key sectors of the economy is a possibility. However crisis manifests itself, Harvey argues global workers’ movements could undergo a renaissance as capital seeks to find more pools of cheap labour as the avenues of dispossession dry up. In fact, he notes the irony of the left and progressive forces abandoning class as neoliberalism ever more starkly retrenches class relations and class privilege. As he puts it, ‘if it looks like class struggle and acts like class war, then we have to name it unashamedly for what it is. The mass of the population has to either resign itself to the historical and geographical trajectory defined by overwhelming and ever-increasing upper class power, or respond to it in class terms’ (p. 202).