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Posts Tagged ‘liberalism’

David Harvey’s A Brief History of Neoliberalism

I just finished David Harvey’s A Brief History of Neoliberalism (Penguin, 2007). I highlighted a lot of passages (incidentally, it was the first whole ebook I’ve read–which was fine except for the need for an internet connection), which I want to go back over and write about here, but the main argument that he makes, much like the Canadian authors I’ve been reading (see category->neoliberalism in Canada), is that neoliberalism is not fundamentally about monetarist economic policies: it is really about the restoration of elite class power. In Harvey’s words, neoliberalism can be interpreted “either as a utopian project to realize a theoretical design for the reorganization of international capitalism or as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites” (19). So, on the one hand neoliberalism could be about rejuvenating (international) capitalism in response to the crises that occurred in the 1970s, (which is how it is described in the mainstream, and sold to the masses), or on the other hand it could be seen as opportunism designed to counter the general progress that had been made between the end of the Second World War and the 1970s towards a more equitable distribution of wealth and power within a capitalist system (i.e. Keynesianism, or what Harvey calls ‘embedded liberalism’).

Harvey backs up his belief in neoliberalism as a project to restore class power mostly by analyzing the track record of neoliberalism during the last 30 years: has human well-being increased in general? has society become more equitable? has the distribution of wealth become more even? has the world become more democratic? A number of indicators show that by these standards the record of neoliberalism is abysmal, which does not necessarily mean that neoliberalism is an elite class project–it could just mean that neoliberals have failed in their utopian project (the goal of which is to bring freedom and prosperity to all via the free-market and extreme individualism). However, given the rapid transfer of wealth from the poor to the wealthy, and given the large gap between neoliberalism in theory and neoliberalism in practice, it seems that freedom and prosperity for all may not be the true goal of those who influence policy. This is, I think, where Harvey’s theory of ‘accumulation by dispossession’ comes in. Here is a long passage about it:

The main substantive achievement of neoliberalization, however, has been to redistribute, rather than to generate, wealth and income. I have elsewhere provided an account of the main mechanisms whereby this was achieved under the rubric of ‘accumulation by dispossession’. 9 By this I mean the continuation and proliferation of accumulation practices which Marx had treated of as ‘primitive’ or ‘original’ during the rise of capitalism. These include the commodification and privatization of land and the forceful expulsion of peasant populations (compare the cases, described above, of Mexico and of China, where 70 million peasants are thought to have been displaced in recent times); conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes.
Harvey, David. Brief History of Neoliberalism.
Oxford, , GBR: Oxford University Press, UK, 2007. p 159.
http://site.ebrary.com/lib/ocultrent/Doc?id=10180656&ppg=168
Copyright © 2007. Oxford University Press, UK. All rights reserved.

“The main substantive achievement of neoliberalization, however, has been to redistribute, rather than to generate, wealth and income. I have elsewhere provided an account of the main mechanisms whereby this was achieved under the rubric of ‘accumulation by dispossession’. By this I mean the continuation and proliferation of accumulation practices which Marx had treated of as ‘primitive’ or ‘original’ during the rise of capitalism. These include the commodification and privatization of land and the forceful expulsion of peasant populations (compare the cases, described above, of Mexico and of China, where 70 million peasants are thought to have been displaced in recent times); conversion of various forms of property rights (common, collective, state, etc.) into exclusive private property rights (most spectacularly represented by China); suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); monetization of exchange and taxation, particularly of land; the slave trade (which continues particularly in the sex industry); and usury, the national debt and, most devastating of all, the use of the credit system as a radical means of accumulation by dispossession. The state, with its monopoly of violence and definitions of legality, plays a crucial role in both backing and promoting these processes” (159)

One of the earlier examples of accumulation by dispossession is the Mexican debt crisis in the early 1980s when Mexico declared that it could no longer pay off the massive debt that it had acquired to foreign banks:

“What the Mexico case demonstrated, however, was a key difference between liberal and neoliberal practice: under the former, lenders take the losses that arise from bad investment decisions, while under the latter the borrowers are forced by state and international powers to take on board the cost of debt repayment no matter what the consequences for the livelihood and well-being of the local population. If this required the surrender of assets to foreign companies at fire-sale prices, then so be it. This, it turns out, is not consistent with neoliberal theory.” (29)

Just who are the elite who are actively securing their own class power? Taking ‘accumulation by dispossession’ as a premise, the economic recovery during the neoliberal era is not based on the generation of (much) new wealth through the expansion of industry. Rather, new ‘wealth’ and accumulation are the result of finanzcialization (numbers games), enclosure of commons (e.g. the commodification and privatization of water), and the diminishment of the power of organized labour (e.g. the decline of wage rates in real terms). Thus, “one substantial core of rising class power under neoliberalism lies…with the CEOs, the key operators on corporate boards, and the leaders in the financial, legal, and technical apparatuses that surround this inner sanctum of capitalist activity” (33). Another group of highly influential elites are the owners of the massive corporations that have come to dominate the world economy, for example Rupert Murdoch, Bill Gates, Carlos Slim in Mexico, perhaps Conrad Black in Canada, and the Walton family. “the incredible ability not only to amass large personal fortunes but to exercise a controlling power over large segments of the economy confers on these few individuals immense economic power to influence political processes. Small wonder that the net worth of the 358 richest people in 1996 was ‘equal to the combined income of the poorest 45 per cent of the world’s population––2.3 billion people’. Worse still, ‘the world’s 200 richest people more than doubled their net worth in the four years to 1998, to more than $1 trillion. The assets of the top three billionaires [were by then] more than the combined GNP of all least developed countries and their 600 million people’”(43).

“While this disparate group of individuals embedded in the corporate, financial, trading, and developer worlds do not necessarily conspire as a class, and while there may be frequent tensions between them, they nevertheless possess a certain accordance of interests that generally recognizes the advantages (and now some of the dangers) to be derived from neoliberalization. They also possess, through organizations like the World Economic Forum at Davos, means of exchanging ideas and of consorting and consulting with political leaders. They exercise immense influence over global affairs and possess a freedom of action that no ordinary citizen possesses” (45).

There are a lot of other interesting parts in this book, including the influence of neoliberalism on ethics and rights (e.g. the connections between negative rights, privatization, and individualism); on postmodernism as a symptom of neoliberalism (the idea that “postmodern intellectual currents…accord, without knowing it, with the White House line that truth is both socially constructed and a mere effect of discourse,”(198) or in other words that there are no absolute moral truths so we can/should do whatever we want or whatever best suits our interests or acquisition of power); on democratic processes (e.g. the rise of NGOs, which are essentially private sector (i.e. not democratically accountable) groups); on the current tendency towards neoconservativism, which has less interest than neoliberalism in disguising its embrace of authoritarianism; the contradictions caused by neoliberal policy (e.g. the tendency toward large monopolistic companies like walmart and google, rather than increased innovation through competition); on Polanyi and the value of alternative, collective rights (e.g.”the the right to life chances, to political association and ‘good’ governance, for control over production by the direct producers, to the inviolability and integrity of the human body, to engage in critique without fear of retaliation, to a decent and healthy living environment, to collective control of common property resources”(213)); and more.

I haven’t offered any critical comments on Harvey’s book here, possibly because I think that it is pretty much right on. I thought that the chapter on China was very dry and economistic, and I tend to twinge whenever I read sweeping condemnations of China, entirely as a result of the influence of SLE. This is a very unpopular stance though these days. It is interesting though that Harvey’s criticism of China and its ‘human rights record’ is not coming from the usual place of (hypocritical) outrage about how draconian China is compared to the free and liberal west. Harvey is critical of Deng’s neoliberal turn, and the whole idea of ‘capitalism with Chinese characteristics’ which has involved the destruction of the iron rice bowl, the creation of an elite class, increased privatization of services, implementation of user fees, the dislocation of millions of peasants, and the destruction of the power and influence of organized labourers. Hmmm, it seems that I ended up being uncritical of Harvey again…

Leo Panitch on what socialism is, and liberalism isn’t

The socialist ‘utopian goal’ is built around realizing our potential to be full human beings. What separates this ideal from its liberal roots is not only socialism’s commitment to extending this principle to all members of society, but also its insistence that the flowering of human capacities isn’t a liberation of the individual from the social, but is only achievable through the social. Ideals are always linked to some notion of justice and freedom. Notions of justice revolve around the egalitarianism of certain outcomes (like distribution of income or wealth) or the legitimacy of a process for reaching goals even if the ultimate results are unequal (equal access to opportunities). Notions of freedom generally divide into freedom from an external arbitrary authority (the state) or the freedom to participate in setting the broad parameters that frame the context of our lives (as in current liberal democracies). The socialist ideal does not exclude these other moral spaces, but locates them on the specific terrain of capacities: capitalism is unjust and undemocratic not because of this or that imperfection in relation to equality or freedom, but because at its core it involves the control by some of the use and development of the potential of others, and because the competition it fosters frustrates humanity’s capacity for liberation through the social.1

  1. ”Transcending Pessimism”, Socialist Register 2000 []