Thoughts on David Harvey
David Harvey’s A Brief History of Neoliberalism (2005) is a comprehensive journey of neoliberalism, particularly as it relates to the third world and developing countries through Western manipulation. Harvey captures the complexities and subtleties of the economic market, while seamlessly piecing together macro policy adjustments and noteworthy political movements to the quotidian practices of common people everywhere; politics has never been so clear. Chapters 1-3 pave a foundational argument on the favorable conditions which evoked neoliberalism, the tools necessary to enforce it and the contradictions between its theory and application on the global market.
But what is neoliberalism? Harvey defines it as the “…imposed state apparatus whose fundamental mission was to facilitate conditions for profitable capital accumulation on the part of both domestic and foreign capital.” (2005,7) The birthplace of neoliberalism occurred during the tumultuous economy of the 1970’s; alarmed by the halted market growth, negative interest rates and meager profits, the 1 percent and upper classes everywhere, pursued novel ways of securing income and maximize interest (15). While proponents euphemistically argued neoliberalism as a “utopian project” (19) “Neoliberalization was from the very beginning a project to achieve the restoration of class power” citing the drastic jump of median compensation between workers and CEO’s from 30:1 in 1970, to 500:1 by 2000. Socialist Chile proved an ideal experiment for US-backed neoliberalism to covertly gain power. Utilizing Chilean economists educated by the University of Chicago and financially supported by corporate interests groups, to produce research in favor of neoliberalism and eventually ‘negotiate’ neoliberal policy reform which left Chile with “privatized public assets, opened up natural resources to private and unregulated exploitation, privatized social security and facilitated foreign direct investment and freer trade” (8). These “structural adjustments” (29) targeted economically vulnerable countries, offering an opportunity to reschedule national debt in exchange for welfare cuts, relaxing labor market laws and increasing privatization (29). If such ‘agreements’ weren’t welcome, there remained another results producing tactic; political coups that coercively gained control of governing bodies only to implement free markets and other neoliberal policies that would further polarize the income gap (28). The installment of the Iranian Shah is a prime example of this alternative method. Comforted by the work of the Chicago Boys and the Monday Club in 1970 Chile, the US and Britain adopted neoliberalism in 1979 with the election of Margaret Thatcher, and Ronald Reagan by 1981. With the support of private interest groups and affluent leaders, the West opted for “individualism, private property, personal responsibility” (21) and “deregulation, tax cuts, budget cuts, and attacks on trade union and professional power” (25). Tax cuts for corporations and high incomers, no union support, and global outsourcing initiated a palpable shift that rewarded ruthless opportunism and punished those without any advantage. The historic PATCO strike of 1981, illustrates this aggression, showcasing the strength of the neoliberal Reagan administration by dismantling their union and firing those who sought pay raises in line with their production effort and costs of living (25).
Threatened by wealth stagnation and impending socialism, American upper classes and the corporate elite waged war on social solidarity, replacing it with fierce competition, all under the appealing guise of freedom and patriotism. But when Reagan, Thatcher, or Coca Cola CEO’s invoke freedom, it’s seldom for the marginalized members of society; instead, it’s their freedom, as the global elite, to exploit. Nevertheless “private enterprise and entrepreneurial initiative are seen as the keys to innovation and wealth creation” (64) riding on the parroted “trickle down” theory to persuade the greater public that neoliberalism and free markets help ‘everyone’, especially the poor. While acclaiming individual responsibility, they’re free to offset the blame onto unprivileged communities who can’t pull themselves up by their bootstraps. Marketed as a way to escape the controlling grasp of the state, the public internalized neoliberal free-market policies as inherently American. This nationalist response flourished in the wake of the xenophobic aftermath of WWII and the political tensions of the Cold War, in which communist and socialist sympathies were a dangerous assault on the American patriot. This common sense patriotism was the foundation for establishing public support of neoliberal reform as the political theorist Antonio Gramsci explained: “political questions become ‘insoluble’ when disguised as cultural ones” (39). Neoliberalism grounded in English speaking Anglo-American and European culture became a way to redeem the lost souls trapped in communism, relieve the bloated bureaucratic state and allow the poor to climb out of poverty. Fatalism provided extra pressure for those unsure of what neoliberalism entailed; as Margaret Thatcher put it there is “no alternative.”
Harvey makes clear the distinctions between the theory of neoliberalism and its applicational results, often citing an abundance of contradictions. While neoliberal policies champion freedom, collective work like unions and other alliances are vehemently opposed, as witnessed by the failed PATCO strike. Neoliberalism then limits democratic government while simultaneously lobbying to secure state protections. This selective intervention is profoundly at odds with the original template of the neoliberal practice of an intervention-free economy in which the state is strongly distrusted. By traditional practice, bailouts from the state for failed loan investments should be non-existent, yet this is not the case. Instead, neoliberalism supports the state only to gain access to financial aid, even at the expense of its citizens. Another unsettling aspect is the creation of quasi-governmental institutions (76) that merge corporate and state workforces to draft and implement neoliberal legislation. A relevant example would be private development firms, intending to gentrify an impoverished neighborhood, allowed to oversee state policy reform thus securing development loopholes that were previously unattainable. Again, these public-private partnerships are fundamentally at odds with traditional neoliberal theory. Yet, they continue to assume risky investments (i.e providing loans and debt adjustments to developing countries) and avoid the consequences of default when it’s borrows are unable to repay. There is a persistent lack of accountability with neoliberalism that remains entirely overlooked. As if it couldn’t get any worse, Harvey discusses neoconservatism as holding the same goals of neoliberalism with a pension for militarization and authoritative power backed by moral ethnocentrism. Abandoning the ubiquitous veil of universal progress, neoconservatism “seek(s) legitimacy for that power, as well as social control through the construction of a climate of consent around a coherent set of moral values” (2005,83). Suddenly, the poor, union workers, universal healthcare advocates, public education reformists, and environmentalist are morally impoverished rebels. Never has neoconservatism seemed more relevant.