"A Brief History of Neoliberalism", Chapter 7

Having cornered the ideological market via naked repression and the subtler re-organization of what Gramsci calls "common sense" (i.e. "the sense held in common"), neoliberalism has on the one hand effectively foreclosed mainstream debate "as to which of several divergent concepts of freedom might be appropriate to our times" [183-184]. Under neoliberalism, freedom is simply market freedom, and rights boil down to individual property rights; even FDR's Keynesian policies and wishy-washy "Obamanomics" sound like communist extremism given neoliberalism's ideological ambiance. On the other hand, through its history of accumulation by dispossession, social corrosion and natural despoliation, neoliberalism itself accounts for "the emergence of diverse oppositional cultures that from both within and without the market system either explicitly or tacitly reject the market ethic and the practices neoliberalism imposes" [185]. Harvey argues in Chapter 7 that although there are signs of growing discontent within policy circles as regards the performance of much-touted neoliberal solutions, true change has to come from "outside the frames of reference defined by this class power and market ethics while staying soberly anchored in the realities of our time and place" [188]. To leap over our shadow in this way is possible in any case because the neoliberal organization of consent has its limits as well as its unintended consequences, and because "these realities [of our time and place] point to the possibility of a major crisis within the heartland of the neoliberal order itself" [Ibid.].


Neoliberalism is rife with economic and political contradictions. These can be contained through locally damaging but globally manageable financial crises, but only at the cost of practices departing significantly from neoliberal theory [Ibid.]. This suggests that despite its continuing hegemony in the ideological arena, neoliberalism is "in trouble if if not actually dead as a viable theoretical guide to ensuring the future of capital accumulation" [Ibid.]. Moreover, the contradictions of neoliberalism cannot rule out an Argentina-2001-type situation even in US, which would have catastrophic consequences for local as well as global capitalism [189]. This is of course a doomsday scenario, but as Harvey argues (and backs up with a painstaking reconstruction and expansion of Marx in his stellar The Limits to Capital), "there is a limit to which this system can progress" [190].


That there's a limit means not only that it is increasingly difficult for American capital to be realized (in Marx's precise sense), but that in simple terms, it's running out of frontier. Rosa Luxemburg (in The Accumulation of Capital) famously argued that capitalism needs a non-capitalist outside to survive (for example: a crisis of over-accumulation in the centers of global capitalism can be mitigated by forcing open "primitive" or "under-developed" foreign markets through economic pressure or open imperialism). This theoretical insight has been critiqued, refined and expanded by subsequent theorists, but at bottom it means that capitalism survives via periodic cycles of primitive accumulation or, as Harvey prefers to term it, "accumulation by dispossession". At the most general level, a look at recent history appears to bear this insight out. What we are witnessing now in the US, especially as regards the housing bubble and the ruination of vast swaths of the population through consumer debt, is a truly cannibalistic form of capitalism: American capital, effectively, is visiting accumulation by dispossession on American citizens.


An unworkable, cannibalistic neoliberal order will either fall on account of its own contradictions, in particular the class struggle it perpetuates and exacerbates, or it will consolidate its class rule by more and more open neoconservative authoritarianism (neoconservatism being a natural rather than monstrous or unaccountable offspring of neoliberalism). As Harvey states, "regimes of accumulation rarely if ever dissolve peacefully" [189]. Neoliberalism will not go gentle into that good night for the very reason that it is about class power, and not about economic efficiency and material abundance for the many. We can expect that the struggles surrounding the G20 coordinated austerity plan and so on will only sharpen as things develop. We can also expect increasingly open class warfare on the part of the rich to the extent that their economic "solutions" reveal themselves for what they are: accumulation by dispossession visited on the general public, with a view to further enriching the upper class. If class warfare on the part of the dispossessed is also inevitable, to the extent that this category embraces an increasingly large portion of the general population, the field is ripening for insurrection and - this is our hope in any case - for revolution.


This opens the question of the particular characteristics, direction(s) and prospects of the emergent resistance to the neoliberal order. If the recent G20 convergence in Toronto has taught us anything, it's that parliamentary politicians and the traditional organized or "official" Left continue to play the same game as their neoliberal masters. A Black Bloc of a few hundred smashing corporate storefronts caused a mass moral panic among a Left that could not even conceive of the moral rightness of property damage against the order that it professes to oppose. The official Left did the conservative government and mainstream media's job admirably in quickly denouncing militant comrades as terrorists, criminals, or agents-provocateurs. This is an exemplary case of what Lukacs long ago identified as the fetishization of legalism; apparently the mainstream Canadian Left is incapable of imaging cases where tactics may be illegal, but also morally right and pragmatically called for. Evidently, it has not even done the necessary prerequisite work of untangling the questions of legality, morality, and tactical soundness.


Harvey himself speculates on the shape of the resistance to come, taking shots at Hardt-and-Negri style abstractions as well as principled narrowly-focused local activism. There must be a global analysis to guide the resistance, but he allows that an expanded account of the local will continue to be a vital point of leverage in future struggles. Essentially, demands, agendas and tactics must be locally tailored and appropriate, but they must also be revolutionary - and this, precisely, entails a view to unity and an emergent form of activist organization. Neoliberalism's self-serving, empty and formally negative rights discourse must also be opposed by a more robust and positive vision of human rights, namely in terms of a right to economic security and prosperity.


The main lesson to take away from Harvey, in any case, is the following: "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 either to resign itself to the historical and geographical trajectory defined by overwhelming and ever-increasing upper-class power, or respond to it in class terms" [202]. In practical terms this means a subject-position cleansed of a neoliberal "common sense" that would have over seventy percent of Canadian citizens cheerfully condoning the repressive actions of a police force hired to ensure that dispossession of public assets could go unimpeded. As regards the general content of this subject-position, the Industrial Workers of the World put it best perhaps, in the preamble to their constitution: "The working class and the employing class have nothing in common."

"A Brief History of Neoliberalism," Chapter 6

Chapter Six puts neoliberalism "on trial," and the central question is whether the implementation of neoliberalism has done what its ideological proponents claim it does: protect individual freedom and increase his or her free choice.

Not to spoil the fun, but we already know. We've lived through the financial crisis and everything that's followed. But this does not render Harvey's analysis in Chapter Six redundant or obsolete. It documents many of the warning signs, and provides markers for making sense of what seems to be yet another reinforcement of class power, at least concerning the weak reforms proposed in the United States. [1]

But more importantly, Harvey provides a analytical toolkit to evaluate whether or not neoliberalism continues by different means, for he argues that neoliberalism is much more pragmatic than ideological. While its ideological proponents might bluster about mistakes they might have made (Writing this reminds me of a line from David Mitchell's novel Cloud Atlas: "Where there's bluster, there's duplicity"), much of--if not all-- the financial and institutional infrastructure is still in place. Even if, before the crash, neoliberalism had failed to stimulate worldwide growth [2], and even if "all global indicators on health levels, life expectancy, infant mortality, and the like show losses rather than gains in well-being since the 1960s" (p. 154), several tenets of neoliberalism seem unshakable.

Which leaves us with the class power thesis: neoliberalism proved appealing because it provides a system for re-entrenching class power domestically and redistributing wealth from the global south to the global north's financial centers. I don't think it's a stretch to argue that two of the crucial analytical indicators of the retreat of neoliberalism would be the reversal of these trends. There are two other indicators that I think we should watch (that is, on which we should focus in out critiques).  

First, accumulation by dispossession. Harvey renovates what Marx called "primitive accumulation," because dispossession is an ongoing, rather than completed, process. The concept includes (among other things) privatization and commodification, financialization, closure of commons, transfer of state or public property rights to private property rights, and "a raft of techniques such as the extraction of rents from patents and intellectual property rights [sometimes stolen from the general intellect of indigenous or  might we say 'underprivatized' populations --D.Z.S.]  and the diminution or erasure of various forms of common property rights (such as state pensions, paid vacations, and access to education and health care) won through a generation or more of class struggle" (pp. 159-160).

Second, the prevalence of NGOs in overexploited regions. Often NGOs fill the void left by a collapse in public services in the face of political or environmental crisis. And while they can fulfill basic needs, they do not provide a long term solution to crisis (that is, if they aren't part of fomenting a crisis as a front group for particular interested parties-- think US involvement in Venezuela). Because NGOs are not accountable to local populations and often negotiate directly with state or class power, they cannot or do not step out of the neoliberal framework, but rather reinforce it (p.177). It might be worth quoting what I wrote in a review, loosely speaking, of Peter Hallward's Damming the Flood:

Non-governmental Organizations are not neutral. This is a difficult point to get across. First, it probably has to do with the neutral sounding name, when many of these groups could properly be called, in the case of Haiti, Ideological Counter-state Apparatuses. Hallward shows how the operation of NGOs allows 'rich countries a morally respectable way of subcontracting the sovereignty of the nations they exploit' (179). While some of these groups do respectable work with the poor and exploited, the problem remains that their primary responsibility is to the sources of their funding, which means that they function according to a mandate set not by the people of Haiti, but to rich donors outside of the country. Instead of directly giving foreign aid to the government, where it has the possibility of being utilized according to a plan (here health, there jobs, there education), these tasks are privatized, fragmented, and often rely on elite contacts for local distribution, which reproduces class inequality.

Let's not forget that some of the same people who are out re-establishing class power are the same that sit on the boards of some NGOs. Which reminds me of a problem that I have about Harvey's use of 'upper class' or 'elite' to designate class power. While I admit that 'bourgeoisie' sounds dusty and Victorian, these other terms seem to be too available for capture within non-Marxist, parliamentarian, and/or wrongheaded right-wing critiques of 'power' or, might we say, class power. The question is, how can we designate the ruling class of the contemporary order, in a way that describes it concisely and accurately?

These trends can only be reversed by movements that can establish alternate forms of social organization, that can move from local resistance to broader democratic governance (and I don't mean that in a parliamentarian sense). As difficult or abstract as such projects sound, fighting the global resources of capitalism demands/requires movements that can establish-- or organize?-- "freedom of speech and expression, of education and economic security, rights to organize unions, and the like" as primary freedoms, while making  "property rights and the profit rate derivative" (p. 182).

Matt's going to finish our reading of A Brief History of Neoliberalism this week by discussing 'Freedom's Prospect.'

Notes

[1] I've previously discussed some of the proposed strong reforms here.

[2] The numbers: "Aggregate global growth rates stood at 3.5 per cent or so in the 1960s and even during the troubled 1970s fell to only 2.4 per cent. But the subsequent growth rates of 1.4 per cent and 1.1 percent for the 1980s and 1990s (and a rate that barely touches 1 per cent for 2000) indicate that neoliberalization has broadly failed to stimulate worldwide growth" even with the deficit spending of the United States and China (p. 154).

"A Brief History of Neoliberalism," Chapter 5

While Chapter 4 of David Harvey's A Brief History of Neoliberalism outlines the uneven geographical implementation of neoliberalism, Chapter 5 analyzes the "peculiar path" of China's entry, via  the reforms initiated by Deng Xiaoping, into an increasingly neoliberalized and globalized economy (although it is more proper to say 're-entry' regarding the longue durée of China's relationship to global political economy). [1] Whether the outcome is socialism 'with Chinese characteristics' or privatization 'with Chinese characteristics,' the transformation of China's economy over the last thirty years has led to high growth, a rising standard of living, but also dramatic inequalities of wealth between urban and rural populations, with the resulting unrest and instability that such inequalities produce. [2] Much of this growth has been export led, and as such, China has benefited from the international frameworks for trade and finance that have promoted neoliberalism.

Unsurprisingly, especially for those who have been following our discussion, the central question for Harvey is whether the transformation of China's economy has led to the reconstitution of upper class power. His analysis is focused and does not lapse into shock and awe that the more popular punditry has produced while discussing China (some of these tendencies are described in Perry Anderson's review for the London Review of Books entitled "Sinomania"). Harvey argues that China has constructed "a particular kind of market economy that increasingly incorporates neoliberal elements interdigitated with authoritarian centralized control" (p. 120). In this regard, the salient features of China's political economy are:

• Accumulation by dispossession. Privatization of communal property and steps toward the financialization of the economy has created speculative bubbles in real estate. Corporatization of state owned enterprises followed by buyouts of worker shareholding (sometimes through coercive means) and state bailouts of non-performing loans have transferred large amounts of wealth to the elite. Yet class formation, Harvey argues, has been a complicated affair; while reforms have prevented "the formation of any coherent capitalist class power bloc within China," they have not prevented, through a combination of corruption, clientelism, and opportunism, a "growing integration of party and business elites in ways that are all too common in the US" (pp. 123, 150).
• Steep inequalities produced by uneven geographical development. Economic reform has reinforced social inequality between urban and rural areas. Not only is there a large disparity in income, there are reductions in social services and the implementation of user fees for public services. Residency restrictions (separating town and country) have led to a labor force of peasants (especially young women) that-- lacking legal protection-- is "vunerable to super-exploitation" not only through low wages, but also through non-payment of wages and pension obligations (p. 148).
• Proletarianization. The working class has nearly tripled between 1978 and 2000, increasing from 120 million to 350 million (270 million workers plus 70 million peasants who have found wage work). Greater flexibility (that is, precariousness) in the labor market, and uneven geographical development has produced large labor surpluses that the Chinese state has confronted through public deficit spending, on dam projects, and massive projects in infrastructure and public transportation. [3]

Nevertheless, China cannot just deficit spend its way out of political upheaval. As Giovanni Arrighi notes in Adam Smith in Beijing, "public order disruptions" (protests, riots, and other forms of unrest) have increased from around 10,000 in 1993 to 87,000 in 2005. [4] Harvey concludes with remarks on the possibilities for political subjectivity and mass movements in China. Rather than paraphrase, this passage is worth quoting at length:

Both state and migrant workers, [S.K. Lee] suggests, reject the term working class and refuse 'class as the discursive frame to constitute their collective experience'. Nor do they see themselves as 'the contractual, juridical, and abstract labour subject normally assumed in theories of capitalist modernity', bearing individual legal rights. They typically appeal instead to the traditional Maoist notion of the masses constituted by 'workers, the peasantry, the intelligentsia and the national bourgeoisie whose interests were harmonious with each other and also with the state'. In this way workers 'can make moral claims for state protection, reinforcing the leadership and responsibility of the state to those it rules'. The aim of any mass movement, therefore, would be to make the central state live up to its revolutionary mandate against foreign capitalists, private interests, and local authorities (pp. 149-150).

Whether the Chinese state responds to these challenges through outright repression, opportunist intervention, class compromise, or through a more egalitarian redistribution of wealth remains to be seen.

Next week, we will conclude with Chapters Six and Seven.

Notes

[1] Recall, of course, Mao's well-known remark that Deng was a secret 'capitalist roader.'

[2] Not to mention large scale and rapid environmental degradation.
[3] Deficit spending, and Chinese state control of capital flow run counter to the "global rules of the IMF, the WTO, and the US Treasury." While Harvey notes that these kind of economic practices cannot continue "in perpetuity" due to China's agreements with the WTO (for example), it's not difficult to notice that China uses its large holdings in US debt for political leverage.
[4] See Arrighi, Adam Smith in Beijing (London: Verso, 2007), 377.

"A Brief History of Neoliberalism", Chapter 4

Harvey emphasizes the "universal tendency [of neoliberalism] to increase social inequality and to expose the least fortunate elements in society ... to the chill winds of austerity and the dull fate of increasing marginalization" [118]. This tendency is no accident. Recall that he interprets neoliberalization as a redistributive process: the rich, through force of arms, political maneuvering and the construction of mass consent, gut social infrastructure and break or co-opt organized labour and social movements in order to line their own pockets and cement their class power. Chapter 4 describes the geo-historical particulars of this process over the past few decades. Neoliberalization has had far from universal consequences on the world stage. Harvey enumerates local conditions, geo-political and other particular factors to sketch an explanation of why some countries have fared better than others, and why at particular times. Nonetheless, he suggests that neoliberalism, which touts itself as the only cure for sick economies, is neither a panacea, nor, but for the very small minority of the ultra-rich, anything resembling a medicine.

The proof that neoliberalism is about class power and not about economic efficiency and abundance is in the numbers. Harvey underscores that the true economic success stories of the 80s and early 90s belonged not to countries implementing neoliberal policies, but more mixed economies like Germany and Japan, which followed corporatist or at least more traditonal/integrated models of employment and social spending. Such models "did not, however, facilitate the restoration of class power" [89]. Those pushing the neoliberal agenda had therefore to discipline these economies and bring them full stop into the neoliberal fold. Harvey enumerates the components of their project: the "turn to more open financialization" (i.e. speculative capital) [90], "the increasing geographical mobility of capital" (outsourcing, etc) [92], persuasion, cajoling and coercion of many "developing countries" by the "Wall Street-IMF-Treasury complex" dominating the Clinton years (recall the fate of post-Apartheid South Africa) [92], and finally, the "ever more powerful ideological influence" exerted by "the global diffusion of the new monetarist and neoliberal economic orthodoxy" [93]. These factors came together to form the so-called "Washington Consensus" of the mid-90s, cementing the view that neoliberalism is the only answer to what ails the world's economies.

So here we are in 2010 in the midst of a protracted global economic crisis. Neoliberalism has continued to wreak havoc on the environment and punish the most marginalized. South American countries, having had more than enough neoliberalism (it was there that neoliberalization was first pulled off, by open violence), experiment with different economic models. Insurrectionary anti-capitalist situations are blooming in Greece, Nepal and India.

The question becomes: why, given all this mass unrest and the repeated failure of neoliberal policies to provide a stable and healthy economy, are we swallowing the neoliberal pill the G20 has offered us? Naomi Klein has pointed out in The Shock Doctrine that neoliberalism is an ideology, in the sense that it seals itself off hermetically by employing the fallacy of "the exception that proves the rule". Refuting instances, for example massive unemployment and social unrest resulting from neoliberalization, are chalked up to not enough neoliberalization. Even when austerity measures provoke widespread revolt, the neoliberal line is to continue to insist that the market is distorted by state intervention, or, more baldly, to claim that the people losing their jobs and social programs are personally responsible, and in any case simply ignorant of the benefits that will come. The argument that neoliberal policies are necessary to foster "a good business climate", so ubiquitous as to seem a tautology, is similarly ideological [117]. Given that neoliberalization consistently produces mass social unrest, it is unclear how it is able to claim that it is best suited to attract investors.

In Canada, where the G20 was recently hosted, the situation does not appear to be so bad. Nonetheless, we feel the effects of the global meltdown and are told that cutting public infrastructure will somehow get us back on our feet. The Toronto police ever so politely reminded us with rubber bullets, sound cannons, kettling, illegal searches, detentions, and even made-up laws that it is very naughty of us to show our disagreement. Heartbreakingly, over seventy percent of Canadians feel the police response was justified, and almost no one has even bothered to look into how the G20 mandate affects them. But this is only consistent with what Harvey is saying: "It has been part of the genius of neoliberal theory to provide a benevolent mask full of wonderful-sounding words like freedom, liberty, choice, and rights, to hide the grim realities of the restoration or reconstitution of naked class power, locally as well as transnationally, but most particularly in the main financial centres of global capitalism" [119].

"A Brief History of Neoliberalism," Chapter 3

Let's face it: the more prominent contemporary continental philosophers have not attempted  too many in-depth analyses of the functions of the neoliberal state form. Given that they are often focused on revitalizing a theory of the subject in our cynical and consensual times, and given that talk about seizing state power evokes whispers about Lenin or Stalin-- that is, authoritarianism-- this makes sense. Nevertheless, it also makes sense that a theory of collective subjectivity should say something about what we are up against, about the interaction of the state and capital in what David Harvey calls neoliberal governance.[1]

Hardt and Negri have already shown us the wrong direction; recall in the heady days when so many people were reading Empire, how misguided their celebration of the end of big government was even then, which they attempted to rectify in Multitude.

Since then, Zizek has taken some interest in delineating the relationship between the state and capital, but he has been unusually tentative. When talking about the use of patents to generate profit through rents, in First as Tragedy, Then as Farce, he writes:

Perhaps therein resides the fundamental "contradiction" of today's "postmodern" capitalism: while its logic is de-regulatory, "anti-statal," nomadic, deterritorializing, and so on, its key tendency to the "becoming-rent-of-profit" signals a strengthening of the role of the state whose regulatory function is ever more omnipresent (p. 145).[2]

The general point about rent extraction is correct, but it's addled with enough Deleuzian jargon and inverted commas that its impact is completely muted. I've annotated this passage in my copy; it says that Zizek could straighten this out if he spent more time reading up on political economy rather than Chesterton, Paul, etc. [3] Which is why we're now reading through the third chapter of David Harvey's A Brief History of Neoliberalism.

Probably part of the provisional character of the philosophical analysis of the neoliberal state is derived from its pragmatic variability. While the neoliberal state is relatively simple to define in theory, neoliberal governance often departs from the theoretical template. If we accept what I will call Harvey's 'class power thesis': (neoliberalism is a political project to restore class power), then these pragmatic departures should be expected.

In its theoretical form the state would promote individual choice through the guarantees of property rights, free trade, free markets, and rule of law. Individual choice is contrasted with state decision making, and in all cases-- theoretically-- the interaction of and competition between individuals in the private sphere/market is held to be more efficient and productive than public decision making (of course, more efficient and productive for what end?). The 'free choice' of the individual-- even if this is the legal fiction of the business or corporation as individual-- is "regarded as a fundamental good" (p. 64). Hence neoliberals are "assiduous" when it comes to implementing the privatization of public goods and the deregulation of markets (what, following Harvey, we've called forcing open markets), and they exhibit strong preferences for juridical resolution of individual-social conflicts rather than democratic or parliamentarian means.

Even in theory several contradictions and tensions are present. Harvey notes that neoliberalism has some theoretical difficulty when confronted with monopoly power, market failures (especially regarding environmentalism) that are often conjured away with questionable assumptions, and a fetish regarding the 'technological fix' for all problems (do I have to mention BP here?), even if technology is in some cases socially disruptive.  Nevertheless, these tensions have often been turned to pecuniary advantages through temporary fixes. Rather than resolving crises, neoliberalism provokes them:

There is an inner connection, therefore, between technological dynamism, instability, dissolution of social solidarities, environmental degradation, deindustrialization, rapid shifts in time-space relations, speculative bubbles, and the general tendency towards crisis formation within capitalism (p. 69).

Rather than interpret this situation as an accident, the class power thesis grasps these connections as means for the redistribution of wealth. Even crises, as Harvey discusses in Chapter 4, serve as a mode of redistribution.

In practice, neoliberal governance exhibits two fundamental biases that show how decisions favoring class power trump the theoretical template. First, when faced with a decision between 'fostering' a 'good business' or 'good investment' climate and labor or environmental concerns, neoliberal governance chooses in favor of business and investment. Not that on all levels these decisions are specifically made with class motives behind them. Rather neoliberal political economy is structured to coerce competition between cities, regions, countries; so while not all decisions need exhibit class motive (often at the local levels they are made to preserve a collapsing set of social relationships), the structure does.

Second, neoliberal states "typically favour the integrity of the financial system and the solvency of financial institutions over the well-being of the population or environmental quality" (p. 71). 

The neoliberal reliance (or is this a fetish too?) upon monetarism and the integrity of money means that neoliberal governance "cannot tolerate any massive financial defaults even when it is the financial institutions that have made the bad decision" (p. 73). This is a particularly perverse bias. From a theoretical perspective, the neoliberal ought to hold individual investors responsible for their bad choices, just as neoliberals would want to force people to be responsible for their actions and well-being, their health care, education, pension, etc. As Harvey notes, some "fundamentalist-minded" neoliberals argue that organizations that protect investors, such as the IMF, should be abolished. But they don't prevail over pragmatics Their failure is not unexpected if one uses class analysis.

The protection of finance also benefits the upper class at the expense of the public. Domestically, the general populace is forced to bear the burden of financial failure, just as it happened, most recently, in the 2008 bailout. Since this burden is shifted through the state-- that is, as public debt-- it also constrains future deficit spending on public goods that benefit the majority. [4] Internationally, finance-protection-- brokered through the IMF-- is used to transfer wealth from the global south to the global north through austerity measures,  debt repayment, and the removal of barriers to the flow of goods and capital /foreign investment (although the reverse does not hold).

Of course, the neoliberal response to the movement of organized labor and forms of social solidarity is, as we've already seen, the exception to the rule. One of the prime difficulties of confronting neoliberalism is that it uses competition between regions and improvements in communication and investment flow to break social solidarity. Capital accumulation benefits from uneven geographical development. Even if labor is able to move to regions with better pay and greater benefits, the state can still manage this movement through restricting immigration, or increasing it.

In addition, the state, with its monopoly on violence, can curb certain forms of "redistribution through criminal violence" (what a great phrase) through incarceration (p. 48). It is difficult to ignore both the tendency toward surveillance and incarceration as social policy over the last few decades, especially in the United States. While Harvey does not discuss these social transformations in detail, one of the purposes of reading Harvey is to establish the features of neoliberal pragmatics before turning to how it interacts with other social institutions.

Next Week: We will be working through at least Chapters 4-6.

Notes

1. On 'governance': Harvey writes that one of the pronounced features of neoliberalism is the shift from government ("state power on its own") to governance ("a broader configuration of state and key elements in civil society"). I think this distinction is useful as long as that we add the phrase "... which includes the redistribution of state resources, and transfer of state functions, to private corporations." See p. 77.

2. "Becoming-rent" is discussed in more depth in Christian Marazzi's accessible (although marred by some typographical errors) The Violence of Financial Capitalism. Trans. Kristina Lebeveda (Semiotext(e), 2010), 44-66.

3. Since I'm on the topic, has anybody else noticed how Zizek hardly references Lacan in First as Tragedy? Is this the case in Living in the End of Times as well? Matt, I'm asking you!

4. Thomas Frank's The Wrecking Crew (Metropolitan Books, 2008) argues that neoconservatives deliberately misgovern in order to later justify privatizing government functions.

"A Brief history of Neoliberalism", Chapter 2

Neoliberalization being in the most general terms a re-distribution of wealth from the poor to the very rich, Harvey asks in Chapter 2 how exactly such a blatantly unjust process could have been pulled off. The answer is fairly simple when looking at countries like Chile and Argentina: labour leaders, community organizers, socialist politicians, etc, were jailed, tortured and assassinated by police and military. Demonstrators and strikers were beaten, killed, and terrorized. Social wealth and infrastructure were sold off, in short, under truncheon blows and at gunpoint.

But what about the United States and Britain, where neoliberalism "had to be accomplished by democratic means"[39]? Harvey argues that the success of neoliberalism (i.e. from the point of view of the rich) was prepared in these countries by a construction of consent; this implied gaining hegemony over, mobilizing and manipulating what Gramsci calls "common sense", defined not as that which is sensible, but merely as "the sense held in common" [Ibid.]. Cultural and traditional beliefs, values and fears were employed, in short, to "mask other realities" - namely, the brute economic facts of post-Fordist capital accumulation and the dismantling of social institutions to further line the pockets of the wealthy [Ibid.]. Neoliberalism employed ideological tools especially where existing social mores, traditions and institutions posed barriers to neoliberalization by brute force alone.

This is not to say that Reagan and Thatcher failed to use bribery, threat and an increasingly militarized police to great effect. Rather, it is to point out that existing values were also manipulated in such a way as to render the great majority of the American and English populations blind and complicit to the looting of their own hard-earned social infrastructures. Take for instance the ideal of personal freedoms, which, many Americans flatter themselves has long been a hallmark of their country. As Harvey points out, "Any political movement that holds individual freedoms to be sacrosanct is vulnerable to incorporation into the neoliberal fold" [41]. This is because at the level of personal property rights and freedoms, neoliberalism delivers (that is, to the rich and to a certain strata of corrupt labour); moreover, through its media it aggressively drives home the point that there are no other personal freedoms worthy of the name.

The real coup pulled off by neoliberalism with respect to "common sense", however, was to separate the ideal of personal freedoms, i.e. property freedoms, from that of social justice (whereas, for instance in May 68 in France as well as other left-libertarian crests of history, these formed an ideological knot). The ideology of personal freedoms, divorced from social justice, naturally became a bulwark against state intervention in the economy. Note that corporations are considered persons; therefore the personal freedoms of, to take a contemporary example, BP, serve as a legal and ideological barrier to the idea that the company owes anything to anyone for what it has extracted, and the resultant environmental costs. The success of neoliberalism in organizing "common sense" in this way accounts for the ubiquitous and totally bizarre images of poor Americans marching in the streets for their right to not be able to afford cancer treatments. It also accounts for the dominant perception that property destruction by militants (and cops disguised as militants) at the Toronto G20 convergence was violence par excellence, whereas beatings, unlawful detentions and sexual assaults by police officers against peaceful protesters were largely ignored by mainstream media and roundly praised by all levels of Canada's (increasingly neoliberal) government.

As regards what might be called the North American scene, two points especially are noteworthy here: so-called "postmodernism" and Reagan's organization of a Christian conservative "moral majority" to back the GOP. The first, which comprises a kind of cynical-radical chic, Harvey devastatingly critiques in his The Condition of Postmodernity (required reading for anyone dabbling in the often polluted waters of continental theory). Postmodernism as Harvey reads it is an ideology of personal property rights and the "freedom" to pursue petty, amoral pleasures (Coke or Pepsi? Gay porn or straight? You see?? You're free!!!). This hedonistic ideology has hamstrung or at least significantly confused a substantial section of what would otherwise be the radical youth; therefore neoliberalism has proven "more than a little compatible" with it [50]. The flipside of postmodernism is, of course, the organization of the Christian Right. By grafting "family values" onto an economic programme destructive of the very roots of healthy family life among the poor, Reagan ensured the support of those who would have had the most to gain from his deposal. (It should of course also be underscored that the Democrats, who would otherwise represent a cultural and social counter-pressure to the GOP, have long since been compromised to the core. Chances of election under neoliberalism are slim to nil barring deals with the corporate devil, as it were.)

The story in Britain was much the same - strike breaking, bait-and switch maneuvering, selling off bits and pieces of the social safety net - but it's notable that Thatcher's approval was in the dumps prior to the Falklands/Malvinas war. Reagan and other neoliberal leaders were not slow in taking Thatcher's cue; when things look bad for the neoliberal state, organize a war against a country which can hardly defend itself, and be sure to mobilize as much fear and national pride as possible. This is a model we have inherited, with terrible consequences.

Harvey is sure to underscore the failure of the Left to beat the neoliberals at their game in terms of the "common sense" factor. They lacked an adequate response, but also a positive programme. This underscores that the educational and, dare I say it, propagandistic wing of the new social movements has its work cut out for it. But what about Obama, and his audacity of hope? Can't he be called on to save us? Here is what Harvey has to say: "[The genius of Reagan and Thatcher] was to create a legacy and a tradition that tangled subsequent politicians in a web of constraints from which they could not easily escape. Those who followed, like Clinton and Blair [and, evidently, Obama], could do little more than continue the good work of neoliberalization, whether they liked it or not" [63].

"A Brief History of Neoliberalism," Chapter 1

As I mentioned in the prefatory remarks for our reading of A Brief History of Neoliberalism, David Harvey sets out to analyze a central contradiction of neoliberalism, between the theoretical project to reorganize capitalism around and extension and intensification of property rights, free markets (especially in the financial sector) and free trade, and a political project to re-establish conducive conditions for capital accumulation and for re-entrenching elite economic power (p. 19).

Harvey argues that the theoretical side of neoliberalism primarily functions as a justification of the larger project. In fact, he calls it a "utopian" project because it is never perfectly realized (as its own proponents often say whenever a neoliberal state runs into economic trouble), but rather implemented through "a very complex process entailing multiple determinations and not a little chaos and confusion" (p. 9). Nevertheless, he argues that the redistribution of wealth to the upper classes of a given country is a consistent structural feature neoliberalism. 

The first chapter introduces both the history of the theoretical project and the political project.* As a theoretical project, neoliberalism emerged after nearly three decades on the ideological fringes as a solution to the crisis of embedded liberalism in the 1970s. Embedded liberalism-- usually called Keynsianism-- was the result of a class compromise between a strong working class and the bourgeois state, and was designed to stave off crises the crises that beset 1930s capitalism. To maintain this compromise the domestic policy of a liberal state aimed for full employment, social welfare (in health care, education, etc.) and economic growth (Harvey does not here discuss how the foreign policies of these same states sometimes involved hyper-exploitation of  the populations of colonial, post-colonial, clientele and/or lesser developed locales). Through the 1950s and 1960s embedded liberalism produced high levels of economic growth, but it was unable to resolve the crises of stagflation in the 1970s, compounded by the war in Vietnam and the OPEC oil embargo.

Neoliberalism, historically speaking and not because its era is over, was, when not implemented by military means (as in Chile or Argentina), proposed as one solution to this crisis. It had "long been lurking in the wings of public policy" (p. 19), and can be traced back to the formation of the Mont Pelerin Society in 1947, a group that seemed to view any hint of solidarity beyond meeting in exclusive clubs to be a dire threat to civilization itself. The proponents of neoliberalism did, however, possess a sense of purpose, gradually integrating the financial resources of the elite with their intellectual resources, creating think tanks, promoting their work in academia, and networking. By 1976, two neoliberal theorists-- Friedrich von Hayek and Milton Friedman-- had won Nobel prizes in economics, and by 1980 its proponents had found the sympathetic ears of Ronald Reagan and Margaret Thatcher.

Neoliberalism secured its place in public policy through an ideological process, but Harvey does not define it through its own credo. Instead, he analyzes the policy transformations that came were implemented by its proponents. I won't be rehearsing many of the details, but there are several features that define the turn to neoliberalism. First: a monetary policy "designed to quell inflation no matter what the consequences might be for employment" (p. 23). However, as Harvey argues, monetarism is a necessary but not a sufficient condition for neoliberalism (p. 24). The implementation of neoliberalism took place--takes place-- in other areas of government policy, such as  privatization and deregulation (forcing new markets open...), shifting the tax burden from the rich to the general populace, and the use of austerity measures to break down the power of social solidarity and union organization. And, most importantly, neoliberalization "has meant... the financialization of everything" (p. 33).

Where financialization has led, I've discussed before in a review of Paul Mason's Meltdown (although the review doesn't cover the 'efforts' of the IMF and WTO in enforcing austerity measures while protecting financial instruments).

Harvey;s account of financialization, unlike Mason, has a much stronger class character. I've used, like Harvey, references to the "upper class" or the "elite" instead of the classic term "bourgeoisie" because one of the features of neoliberalism is the reconfiguration of ruling class power. Along with the usual state-corporate clientelism, the rise of information technology and biotechnology, finance is at the forefront of neoliberalism. The 'financialization of everything' has transformed many Western companies from industrial producers to financial operations (like General Motors...). Harvey writes that

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 (p. 33).

In addition, Harvey views financialization as integral to the process and not, as many traditional and Marxists economists view it, as parasitical on real (i.e. industrial) production.

Regarding the working class, however, we largely see (described in Chapter 2) the decomposition of working class power, and disarray in the recomposition of organized resistance to neoliberalism on an international scale. This being said, not all is lost; we do know that there are consistent and local attempts to resist and refuse the exploitation of neoliberalism. The final chapter of A Brief History of Neoliberalism closes with a  general discussion of "Freedom's Prospect."

We've got several chapters to read before getting there. Over the next two chapters we will see how neoliberalism captured hegemony in intellectual, cultural, and political discourses, and how it captures and transforms the state. Through the transformation of state structures neoliberalism could establish its 'inevitability' both ideologically and structurally, "to create a legacy and a tradition that tangled subsequent politicians in a web of constraints from which they could not easily escape" (p. 63).

Later this week: Matt reading Chapter 2, and I will read Chapter 3.

*The usual caveats apply here about the distinction of theory and practice being an analytic tool, etc.

A Preface to Reading "A Brief History of Neoliberalism"

One of the central difficulties late capitalism, Fredric Jameson writes in his Postmodernism, or, The Cultural Logic of Late Capitalism (1991), is cognitively mapping its systematic features. Late capitalism-- what we now typically call neoliberalism-- is, he argues, defined by the compression of time to the point of ahistoricism (although this feature of capitalism was already grasped by Marx in his critique of the Robinson Crusoe stories of classical economists), and the suppression of distance and the saturation of space. This metaphor of 'mapping' itself, however, is paradoxical, because it does not mean that we have recourse to maps to trace this geography, but the very activity of mapping politics in time and space requires grasping the specific reconfigurations of the relationships between history, geography, and political economy in late capitalism.

Jameson's argument, was directed against the anti-systematizing tendencies of the North American reception of postmodernism, the proponents of which often refused to render accounts of politics, culture, and the like, in a systematic totality. His claim-- relevant then as much as now-- is that the variety cultural expressions in late capitalism can only be understood historically as a totality, that accounting for a large set of particular variations is not incompatible with an analysis of the global configurations of political economy.

Nevertheless, these configurations of political economy remained difficult to map, although the totality of their relations are typically now referred to as neoliberalism, a concept that encompasses the aforementioned compression of time-space, the conservative counterrevolution that captured state power in various metropoles in the late 1970s and early 1980s, and the postmodernization (if I can be permitted such a term) of culture. Even this brief description itself betrays the difficulty I'm trying to get at; it is as if each feature of neoliberalism suggests a number of exceptions, throwing us back on the problem of particularity and totality: how is it possible to conceptualize neoliberalism as both a set of particular, concrete variations through the history of the past 30 years and across geographical space, and as an increasingly global, and globalized, totality?

Starting next week, Matt and I will be re-reading one of most clear and concise responses to the preceding questions, David Harvey's A Brief History of Neoliberalism (2005). There are two reasons why this book remains, for me, a constant reference point as I slowly work out the relationships between philosophy, political economy, and praxis.

First, Harvey's arguments and expressions are clear. His terminological choices reflect his conceptual commitments, and cast a critical eye on 'common sense' phrases. Where so many have been inclined to fight over the extent of deregulation or privatization, or whether they are desirable, which locks the debate into a specific neoliberal conceptual field, Harvey re-politicizes the terms. So, for instance, talking about the role of the state in neoliberal theory, he argues that its partisans aren't against the state in toto, they are against a particular kind of state. They don't mind if the state engages in deficit spending for military action, of if it preserves the integrity of money or private property, nor if the state forces open new markets:

if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary (2).

What is this state action? What is so commonly referred to as privatization or deregulation becomes, in Harvey's terms, a use of state power to accomplish political-economical goals.

This kind of analysis is possible because Harvey does not just analyze neoliberalism as a form of reorganizing  and compressing time-space through capitalism (which is a worth contribution alone), he also, second, argues that this form of capitalism is a way to redistribute wealth upwards; that is, Harvey argues that neoliberalism is a political project to reinforce elite class power, through both structural and ideological means. The force of his argument, I think, is the result of his reference to class analysis...

But we're getting ahead of ourselves here. We're only at the 'Preface,' which introduces the reader to neoliberlism and its history. Therefore, I would like to invite our readers to take their copy down from the shelf and read along, and comment, over the next few weeks as we analyze A Brief History of Neoliberalism chapter by chapter, as we discover the continued relevance of Marxist analysis in the so-called era after neoliberalism.

Next week: Chapters 1-3.

Update: I'm usually on top of these things, but I forgot to mention that Matt reviewed Harvey's Spaces of Global Capitalism" back in April.