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David Harvey, A Brief History of Neoliberalism.

David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press 2005)

"NEOLIBERALISM is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade." (2) What we learn in David Harvey's impressive, condensed history of neo-liberalism, however, is that we need to delve much more deeply into the recesses of neo-liberal practice than the first instance, if we are to get a grip on its origins, trajectory, and implications across the globe since the 1970s.

Among the many insights offered up in Harvey's analysis, two principal and related arguments stand out. First, there exists a tense relationship between the theory and practice of neo-liberalism. In choosing to interpret the last three decades of neo-liberalization "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) we are well advised by the evidence to conclude that "the second of these objectives has in practice dominated." (19) A cursory glance at aggregate growth rates before and during the neo-liberal period--approximately 3.5 per cent in the 1960s, 2.4 per cent in the 1970s, 1.4 per cent in the 1980s, 1.1 per cent in the 1990s, and 1 per cent since 2000 (154)--illustrates that in terms of spurring capital accumulation internationally neo-liberalism has been an abject failure. The predicted results of the utopian neo-liberal theory, of a rising economic tide that would lift all boats, were not realized. At the same time, the neo-liberal project has had roaring-to-moderate success in the restoration of class power to ruling elites in many advanced capitalist countries such as the United States and, to a lesser degree, Britain, while fostering capitalist class formation in countries as diverse as China, India, and Russia. (156) Not since the 1920s has global capitalism facilitated such grotesque concentrations of wealth and power.

If this was the intent of capitalist classes beginning in the mid-1970s, then their successes were bigger and better than most would have dared to imagine at the time. Harvey shows convincingly "that when neoliberal principles clash with the need to restore or sustain elite power, then the principles are either abandoned or become so twisted as to be unrecognizable." (19) In this view, then, the "theoretical utopianism of neoliberal argument"--as developed over time by Friedrich von Hayek, Milton Friedman, the Mont Pelerin Society, endless American think-tanks, the business press, and the business schools and economics departments of ivy league universities such as the University of Chicago, Stanford, and Harvard, and innumerable other institutional channels--"primarily worked as a system of justification and legitimation for whatever needed to be done to achieve" (19) the goals of the economic elite.

This leads us to the second and closely related contention advanced by Harvey: that neo-liberalization has acted essentially as a vehicle for the restoration or formation of capitalist class power at the expense of the working classes throughout the bulk of the world, "a naked class power, locally as well as transnationally, but most particularly in the main financial centres of global capitalism." (119) This argument is persuasively theorized and substantiated with empirical data throughout the book.

Harvey recites the now familiar chronology of the transition from the embedded liberalism of the post-World War II global economy to the neo-liberalism of the last quarter of the 20th century, and the opening years of the 21st century. Key junctures include the following: in Chile in 1973, the military coup orchestrated by Pinochet with the support of the American imperial state which overthrew Allende's social democratic government and ushered in the first neo-liberal experiment in economics and state restructuring by 1975; in July 1979 in the United States under Carter's administration, Paul Volker's assumption of the command of the US Federal Reserve and the concomitant radical change in monetary policy; in May 1979 in Britain, Margaret Thatcher's electoral victory as prime minister; in 1980, Ronald Reagan's election to the presidency of the US; and, subsequently, a whole host of ideological, economic, and political processes which produced, by the 1990s, the solidification of the hegemony of the "Washington Consensus." Moreover, in what Harvey describes as "a conjunctural accident of world-historical significance" (120)--an accident, incidentally, that many accounts of neo-liberalism miss--tremendous political uncertainties in China after the death of Mao in 1976, as well as an extended period of economic stagnation in the country, ushered in a period of Chinese market reform under the leadership of Deng Xiaoping just as neo-liberalism was setting sail in Britain and the US. For Harvey, "The spectacular emergence of China as a global economic power after 1980 was in part an unintended consequence of the neoliberal turn in the advanced capitalist world." (121) Finally, Harvey's chronological account of the transition to neo-liberalism prominently features class conflict, a critical component left out of much of the mainstream social science literature. As the global phase of embedded liberalism entered meltdown in the late 1960s--manifested most emblematically by the stagflation and unemployment of the 1970s "labour and urban social movements through much of the advanced capitalist world appeared to point towards the emergence of a socialist alternative to the social compromise between capital and labour that had grounded capital accumulation so successfully in the post-war period." (15) This was the political threat to the ruling classes which, when combined with the economic threat of negative interest rates and "paltry dividends and profits," led the upper classes "to move decisively if they were to protect themselves from political and economic annihilation." (15) The basis was laid for a political project to restore capitalist class power.

The many strengths of A Brief History of Neoliberalism cannot be adequately conveyed in this short space, but include powerful analyses of the devastating impact of neo-liberalism on the environment and labouring conditions (especially for women), a nuanced perspective on the external and internal forces compelling states to turn towards neo-liberalism, and the ways in which Marx's concept of "primitive accumulation" is highly pertinent to the neo-liberal era of capitalism if we see primitive accumulation as an ongoing component of capitalism, and as Harvey therefore prefers to call it, "accumulation by dispossession."

In his discussion of the meaning of class power Harvey highlights how there was "unquestionably a power shift away from production to the world of finance" during the neo-liberal period, which means that a "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) In addition, however, new processes of class formation, marked by the vast fortunes of a few individuals, have taken place in the new sectors of biotechnology and informational technologies. (34) On the controversial question of whether or not an emergent transnational capitalist class can be detected, Harvey charts a middle path. He argues that there have long been international links across capitalist classes and that these ties have deepened during the neo-liberal era, but that this does not mean "that the leading individuals within this class do not attach themselves to specific state apparatuses for the advantages and the protections that this affords them." (35) At the same time, massively rich capitalists also often "exert class power in more than one state simultaneously," and exchange ideas and influence politics through powerful arenas such as the annual World Economic Forum at Davos. (36)

Much of the literature in development economics points to successful "models" of development--most recently South Korea, Taiwan, and China--which ought to be emulated by other "developing" countries. Harvey's consideration of the global dynamics of capitalism, and in particular his discussion of the uneven geographical development of neo-liberalism, exposes the weakness of such a search for model countries. Harvey argues that successful growth states and regions put competitive pressure on other states and regions to mirror their developmental policies, but that the competitive advantages of successful states are generally ephemeral, "introducing extraordinary volatility into global capitalism." (88) Within this context, "certain territories ... advance spectacularly (at least for a time) at the expense of others." (156) The "fact that 'success' was to be had somewhere obscured the fact that neoliberalization was generally failing to stimulate growth or improve well-being." (156)

Perhaps the most frightening and enlightening observation the book makes concerns the ways in which the internal contradictions of neo-liberalism, as well as signs of declining US hegemony on the world stage outside of the military realm, are opening up space for an end to neoliberalism. What is potentially catastrophic about a future transition from neo-liberalism is that the emerging answer to neo-liberalism's contradictions in the United States, and increasingly in China, is the embrace of a neo-conservatism characterized by militarism, authoritarianism, and nationalism. The fact that China and the US may be converging from very different points to a neo-conservative tide does not, as Harvey puts it mildly, "bode well for the future." (151)

Having said all this, I highly recommend A Brief History of Neoliberalism, but not without some reservation. The deepest flaw in Harvey's account emerges in his arguments around resistance. While Harvey rightfully asserts the necessity of renewed working-class struggle from below to counter the project of restoring capitalist class power from above, he also calls, much less compellingly, for the building of social democracy as an alternative. This stops well short of a resistance seeking to overcome capitalism, which I see as necessary if we hope to end imperialist wars, class exploitation, inequality, poverty, hunger, and, finally, if we are to avoid the possible extinction of our species through environmental crises.

Jeffery R. Webber

University of Toronto
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Author:Webber, Jeffery R.
Publication:Labour/Le Travail
Article Type:Book review
Date:Mar 22, 2007
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