Neoliberalism

• How states and market interact - claims that society should be shaped by the free market
• Come to dominate the world since 1918 as scale of debt increased, credit and inter-banking lending dried up and slowed and unemployment rose
• Part of a system where vastly inflated financial sectors which speculate in assets largely unrelated to the real economy in goods and servives
• Neoliberalism as...
  • An ideology (Andersen, 2000; Hall, 1988)
  • A set of ideas (Schmidt and Thatcher, 2013)
  • A form of governmentality (Brown, 2015; Barry et al, 1996)
  • A policy agenda (Venugopal, 2015)
  • A project (Harvey, 2007)
  • A culture (Comaroff and Comaroff, 2001)
• A more nuanced approach to explaining is needed - it is a multifaceted phenomenon

DEFINITION: neoliberalism 'entails a focus on individual responsibility rather than collective meetting of needs' (Dwyer, 1998; MacGregor, 2005)

• Earliest expressions evident from the end of the 2nd World War
• Emerged at the end of the 1970s in the UK and US, a few years later in continental Europe then around the globe
• 1978 - Deng Xiaoping took the first steps towards the liberalisation of Chinese economy
• 1979 - Federal Reserve raised interest rates to any level allegedly required to curb inflation - emblamatic year of the entrance into the new period of neoliberalism
• 1979 - Margaret Thatcher had been elected with a mandate to curb trade union power and put an end to inflationary stagnation (Harvey, 2005)
• 1980s - Reagan was elected President and set the US on course to revitalise its economy and curb the power of labour...and liberate the powers of finance both internally and on the world stage (Harvey, 2005)
  • Applied Reaganomics - during Reagan's presidency, the national debt almost tripled and the US went from being the world's largest creditor nation to the world's largest debttor in under eight years
  • Reagan pledged to make cuts in four areas, including the growth of govt spending, both income taxes, regulations on businesses and the expansion of the money supply - instead the federal debt almost tripledfrom $997 billion in 1981 to $2.857 trillion in 1989

Expressions of neoliberalism:

• Income distribution
• Strong pressure on salaried workers to help restore profit rates
• Political assault upon organised labour
• Deregulation, market friendly re-regulation and extended privatisations
• Bubbles in the asset market compensated
• Debt economy (Harvey, 2012)

• Neoliberalism as class hegemony - imperialism in neoliberal globalisation
  • The overall dynamics of capitalism under neoliberalism, both nationally and internationally, were determined by new class objectives that worked to the benefit of the highest income brackets, capitalist owners, and the upper fractions of management
  • A social order is also a power configuration, and implicit in this latter notion is 'class' power
  • Not only class relations are involved, but also imperial hierarchies, a permanent feature of capitalism
• Hegemony and domination - a common aspect within class and international mechanisms
  • In each instance, a class or country leads a process of domination in which various agents are involved. In neoliberalism, the upper fraction of capitalist classes, supported by financial institutions, act as leaders within the broader group of upper classes in the exercise of their common domination (Dumenil & Levy, 2013)
• Neoliberalism and class
  • Dumenil and Levy concluded that neoliberalisation was from the very beginning, a project to achieve the restoration of class power
  • After the implementation of neoliberal policies in the late 1970s, the share of national income of the top 1% of income earners in the US soared, to reach 15% by the end of the century (Harvey, 2005)

• Effective decapitation of labour movement
• Shakeout of domestic manufacturing capacity to maintain a high interest rate policy
• Abolition of corporatist institutions to allow the shift to market oriented economic policies
• Privatisation of nationalised industries together with deregulation of other sectors to enlarge the scope of competitive forces
• Transformation and internalisation of CIty of London to extend financial markets
• Sustained erosion of social entitlements and workplace protections to intensify competitive relations in the labour market
• In Thatcherite discourse, neoliberal policies were part of the wider program of 'rolling back the frontiers of the state' (Peck & Tickell, 2007) - this meant on the ground attack to the working class
• Decline of the North
  • 'If we try to discourage development and economic growth in large parts of the south of England, in the hope that it will happen in the large cities in the North, we risk losing them altogether'
• How Britain changed under Thatcher...
  • Unemployment was at a record high
  • House price boom
  • Union membership at record lows
  • Strikes at record highs

• 'The crisis that began in 2008 originated in the steps that were taken to resolve the crisis of stagflation and the political threat to capitalist class power in the 1970s in the core regions of capitalism (N America and W Europe), Harvey, 2012