on June 15, 2006
The term neoliberalism is usually heard in the pejorative sense, often coming from Latin American leaders such as Hugo Chavez and Evo Morales. The term refers to an international economic policy that has been predominant in policy-making circles and university economics departments since the 1970's. The four faces on the cover of this book (Reagan, Deng, Pinochet, and Thatcher) are considered by David Harvey the primemovers of this economic philosophy. Reagnomics, Thatcherism, Deng's capitalism with Chinese characteristics, and Pinochet's free market policies marked the beginning of new era of global capitalism.
Neoliberlism as a philosophy holds that free markets, free trade, and the free flow of capital is the most efficient way to produce the greatest social, political, and economic good. It argues for reduced taxation, reduced regulation, and minimal government involvement in the economy. This includes the privitization of health and retirement benefits, the dismantling of trade unions, and the general opening up of the economy to foreign competition. Supporters of neoliberlism present this as an ideal system. Detractors, such as Harvey, see it as a power grab by economic elites and a race to the bottom for the rest.
In this short, but very well researched book, Harvey charts the capital flows of the last thiry years. In the 1970's, there was the breakdown of the Bretton Woods system, with its fixed exchange rates, tariff barriers, and capital controls. It gave way to floating currencies and high trading volumes. Capital started searching the globe for comparative advantage. Proponents claimed that this routed out corruption and inefficiencies, while opponents saw instability and exploitation. Indeed, Harvey produces ample statistics showing how the rich got richer and the poor stagnated. More surprisingly, he points out that the aggregate economic growth during the years of Keynesian management (the decades between World War II and the 1970's) was greater than during the neoliberal era (the 1970's to the present). The neoliberal era benefitted mainly the wealthy. In the US, the richest 1% now control 15% of the wealth as opposed to 8% at the end of World War II.
When Reagan and Thatcher came to power in the late 1970's and early 1980's they used their control of the IMF and World Bank to impose neoliberal policies on the developing world - especially Latin American countries. In the case of Chile, Pinochet - after violently ousting the Allende government - instituted free market policies as prescribed by the Chicago school, and was relatively successful. Other Latin American countries were not so successful, and it created a backlash of populist nationalisms in the form of Hugo Chavez in Venezuela and Evo Morales in Bolivia.
The section on China is one of the best in the book: "Neoliberalism with Chinese Characteristics". Harvey points out that China is not a pure neoliberal state. There is still heavy state intervention in the economy and management of the currency. And as a further criticiem of neoliberalism, he reminds us that China has produced some of the highest growth rates - 9 to 10 percent annually. On the downside, the gap between the rich and poor is growing, and because their currency is held artificially low they are building dangerous overcapacity.
Neither does the US, for that matter, operate according to neoliberal principles. Even as it is urging other countries to maintain minimal goverment and balanced budgets, it is running huge deficits and issuing ever more t-bills to cover its excess spending.
With China and the US - two linchpins in the world economy - not playing according to the rules of the game a crisis is bound to happen. One country is totally geared toward producing and exporting, while the other is content with importing, consuming, and creating more debt. Harvey believes that the global economic readjustment that is going to take place will be painful and possibly violent.
Harvey's excellent little book illustrates, once again, that the perfect market, presupposed by neoliberalism and classical liberalism, does not exist. Unfortunately, he does not offer any remedies to rectify the current situation, nor does he offer an alternative system. Nevertheless, this book is very insightful.
"A Brief History of Neoliberalism" by David Harvey is a concise and razor-sharp deconstruction of the neoliberal movement. Mr. Harvey convincingly demonstrates that neoliberalism is an ideology that has been wielded to enshrine elite privilege at the expense of people and the environment. Assiduously researched and cogently argued, Mr. Harvey offers a jargon-free and readable text that helps readers gain a greater understanding about the political economy of our neoliberal world and what this might hold for us in the future.
Mr. Harvey explains that neoliberal propaganda has succeeded in fixating the public on a peculiar definition of 'freedom' that has served to conceal a project of upper class wealth accumulation. In practice, the neoliberal state assumes a protective role for capital while it sheds as much responsibility for the citizenry as possible. Mr. Harvey details how neoliberal theory is ignored whenever it comes time to bail out corporate interests from bad decision making while the safety net for the working class has been gradually eviscerated. The author effectively intersperses the text with graphs to illustrate how thirty years of neoliberalist policies has resulted in rising inequality, slower economic growth, higher incomes among the upper class, and other measures that serve to convincingly support and prove his thesis.
Mr. Harvey's history of how neoliberalism has gained ascendancy mostly treads through familiar ground but also highlights some key events that are sometimes overlooked by others. For example, Mr. Harvey relates the well-known stories of how the Chilean coup in 1973 opened the door for Augusto Pinochet to implement the first national experiment in neoliberalism, followed by Margaret Thatcher in Great Britain in 1979 and Ronald Reagan in the U.S. in 1980. However, we also gain greater appreciation about the importance of the New York City bankruptcy in the 1970s. We learn how the city's financial crisis allowed for the imposition of neoliberal reforms in a manner that would prove to be a familiar template around the world: the rollback of labor rights, the privatization of public assets, cuts in public services, and increased policing, surveillance and political repression of a markedly polarized population.
Mr. Harvey surveys neoliberalism around the world to discover connections and to analyze its effects. He finds that the U.S. economy has benefited immensely from its ability to extract tribute from other nations, including the U.S. financial community's probable engineering of crises in developing nations in order to scoop up devalued assets on the cheap. The author discusses how economic restructuring programs imposed on poor countries has benefited U.S. and other foreign investors while it has bolstered or created a small but powerful class of wealthy individuals in Mexico, South Korea, Sweden and elsewhere. In China, Mr. Harvey remarks about the ease with which neoliberalism has found a home in an authoritarian state where the political elite have amassed their fortunes by exploiting a defenseless working class. The author is particularly concerned about the symbiotic relationship that has developed between the U.S. and China and muses about the potentially catastrophic financial situation that the two countries' mounting debts might pose for each other and the world economy.
In the final chapter, Mr. Harvey writes passionately about the need to continue building diverse democracy movements within the U.S. that are dedicated to social and economic justice. Although it is true that Mr. Harvey does not detail precisely what must be done, his thorough dissection of neoliberal ideology empowers us to effectively challenge those who hide behind false rhetorical devices in service to privilege. And for that, we should be grateful.
I give this outstanding book the highest possible rating and strongly recommend it to all.
On the first anniversary of 9/11 President Bush made a speech saying, `Freedom is the Almighty's gift to every man and woman in this world... as the greatest power on earth we have an obligation to help the spread of freedom.' Spreading freedom is the primary function of neoliberalization but as George Lakoff stated in `Whose Freedom?' freedom can be a very subjective term. The freedom of neoliberalism is the glory of unfettered, free market economics and the rights of corporations and financial institutions over individuals and governments. It's the freedom to fully exploit resources and workers.
From its founding America's wealthy have feared democracy recognizing that the majority, being poor and middle class, could vote to redistribute wealth and reduce the control held by the elites. After World War II, the middle class in the United States grew dramatically somewhat flattening the countries power base. As a reaction to this dispersal of power the early 1970's saw the formation of groups like The Business Roundtable, an organization of CEO's who were `committed to an aggressive pursuit of political power for the corporation'. As the author writes, `neoliberalization was from the very beginning a project to achieve the restoration of class power'. The neoliberal plan was to dissolve all forms of social solidarity in favor of individualism, private property, personal responsibility and family values. It fell on well funded think tanks like The Heritage Foundation to sell neoliberalism to the general public using political-philosophical arguments.
At the same time a group of economists were working on economic theories that developed into the `Washington Consensus'. These followers of Hayek and Friedman just happened to create economic blueprints for growth that matched up exactly with the goals of the wealthy business elites. The plans were based on the superiority of the marketplace in making wise decisions but also assumed perfect information and a level playing field for competition. As the author writes, `...eminent economic theorists [...] argue that all would be well with the world if only everyone behaved according to the precepts of their textbooks' The neoliberal economists have become so focused on growth that they seem to take a decidedly amoral approach to human suffering. Above all countries needed to focus on privatization and low taxes and definitely avoid deficit spending. What has happened is a widening of the gap between the wealthy and poor. The author suggests that rather than an unfortunate byproduct of neoliberalism or a temporary situation this is the intended result.
The great irony is that the U.S., the world's number one proponent of neoliberalism, generally finds itself breaking the rules. With high deficit spending and massive subsidizing particularly in consumerism and defense spending the United States has generally taken a `do as I say, not as I do' stance. With the amount of political appointee/lobbyists shuttling back and forth between business and government Adam Smith's `Invisible Hand' looks more and more like a crushing fist.
This was not the book I expected. This is a devastating critique of neoliberalism. I didn't agree with everything the author wrote and there are most definitely many positives that have come from globalization but the corporatization of the world has the potential to by an enormous threat. Global Warming has to be the poster child for neoliberal extremism with short term economic growth trumping the welfare of the entire world. David Harvey has a decidedly liberal stance but he backs up his views with sobering facts. Despite being a book on economics I found it extremely readable and recommend it wholeheartedly.
on February 22, 2006
I don't know of a better, more accessible treatment of this subject. Harvey shows how, starting in 1947, a small group of philosophers, scholars and economists took an obscure, marginal and largely discredited set of ideas and transformed them (with major financial help) into the paradigm that now rules the globe. Free market fundamentalism became mainstream and people were persuaded, in Margaret Thatcher's words, that There Is No Alternative. One of the many merits is Harvey's analysis of who wins and loses under this system and yet why so many people -- especially in the U.S. -- have remained in the dark for so long about how neoliberalism functions as a class-based ideology. The author brilliantly lays out the inherent contradictions within the doctrine that may well prove its undoing, or at a minimum, reveal neoliberalism as the tool that restored class power. I believe this book will contribute to neoliberalism's rapidly crumbling facade and I plan to use it for my intro courses in international politics.
Gary Olson, Bethlehem, PA.
on March 19, 2006
David Harvey is an outstanding scholar, from a left wing perspective, who has the ability to crystallise world events and economic trends in sharp, memorable observations. His analysis of neoliberalism as the default belief system of the late twentieth century is convincing and his delineation of its faults, including a wide divergence between the idealism of the theory and its deviations in practice, is also pithy and to the point. As usual, once left wing thinkers move to the solution the issue is less clear, although he admits this himself. He seems to suggest that just as Keynesianism was the underlying paradigm of the first half of the twentieth century, from which it was difficult to deviate without offending 'common sense', so neoliberalism is the prevailing orthodoxy of the last decades of the twentieth century. Hence, it may take some time, and the world to move in a so far unforseeable direction, before a new, perhaps kinder, orthodoxy, can be thought or felt. Nonetheless, full marks to David Harvey for another outstanding book. His book on Postmodernity is a classic and his other books are also readable and convincing. Well worth buying and reading.
on November 2, 2005
David Harvey's "A Brief History of Neoliberalism" does a masterful job of analyzing and historicizing neoliberalism -- whats more impressive is that he does it in so few pages. His chapters on the neoliberal state and China's opening are particularly excellent. He provides an amazing succinct and detailed account of china's political and economic development since Deng. Also how he explains the New York City bankrupcy in the 70s is equally rewarding. His book properly views neoliberalism as a project which has fundementally increased elite class power. The book succeeds in being both challenging and engaging/introductory at the same time. I plan on distributing the book to all of my friends.
This is an essential, thought-provoking book for anyone engaged in international business, the media, corporate strategy and governance. It fills the gaps between what you see in the media and what you experience as a citizen and businessperson by very ably explaining the theory and practice of neoliberalism. This philosophy has largely replaced liberalism as a popular political doctrine. The results are not very impressive from a democratic perspective, according to this analysis by author David Harvey. Armed with a different perspective and interesting sources, he puts neoliberal political thought and practice into its modern context, in everything from foreign policy, to how the media (led by Fox News) presents events, to the emergence of the new super wealthy class built on huge profits raked in by select corporations. He dedicates a chapter to the way this policy has worked in China, and frequently cites its effects in other countries. We think this well-documented short book makes it easier for readers to understand contemporary events and recommends it to business strategists, media professionals and concerned world citizens.
I'm going to do something here that I rarely do: attempt a short review. There are many excellent reviews of this fine book that I don't need to add much except to say that I agree with the bulk of them. I believe that neoliberal ideas have caused incalculable harm over the course of the last several decades. There are signs of increasingly wide discontent and distrust of the kinds of economic prognostications put forward by people like Milton Friedman, Ronald Reagan (admittedly not a great economic thinker, but unquestionably the great popularizer of neoliberal ideas), and their ilk, seen in part by the great commercial success (and surprisingly popular reception) of books like Naomi Klein's THE SHOCK DOCTRINE. Increasingly, people are coming to understand that what is best for General Motors just might not be the best thing for the rest of the world. But there is little doubt that neoliberal and libertarian thinking (and yes, I do not think there are important distinctions between the two -- the best thing I've read lately about libertarianism came from the superb SF novel by Kim Stanley Robinson, GREEN MARS -- one of his characters thinks to himself, "That's libertarians for you -- anarchists who want police protection from their slaves") will continue to confuse thinking about economic and political ideas. But as those ideas have increasingly resulted in nothing more nor less than a shifting of wealth into the hands of a very small number of people, that vastly larger number of people (even in the United States, where economic inequality has been increasingly dramatically since 1979 -- neoliberal ideas were actually first embraced by Jimmy Carter, though with nothing like the religious fervor of Ronald Reagan), have started to realize that all "trickle down" economic policies are a massive con job.
Harvey in this book wants to present the history of neoliberal thinking. "Neoliberal" as a term is in common usage in many parts of the world, but not in the United States. "Neoliberalism" is not a left wing but is a right wing position. The two most famous neoliberal political figures were Ronald Reagan and Margaret Thatcher. Harvey's book is a marvelous recounting of that history and an accurate chronicler of the frequently devastating effects of neoliberal, free market principles. In particular, he writes of the catastrophic effects neoliberal principles have had through their forced acceptance in many non-European countries.
I find very little to differ with in this book, but I would make two distinct recommendations. First, if you want to read a book by David Harvey, there are three others that I would perhaps recommend more strongly than this. If you have any interest in the postmodern debate, his THE CONDITION OF POSTMODERNITY is one of the 3 or 4 greatest works in the field. Next, if you are interested in globalization, I would recommend THE NEW IMPERIALISM, which overlaps a good deal with THE HISTORY OF NEOLIBERALISM. Also, one of Harvey's earlier works, THE LIMITS OF CAPITAL, though a bit more challenging, is one of the best contemporary works extending Marxist (not Communist -- Harvey is both anti-Communist and a Marxist) ideas into a contemporary intellectual framework. So, my first recommendation is to look at those three books. My second is to look at Naomi Klein's THE SHOCK DOCTRINE for a more popular, entertaining exploration of much of the same territory as this book. She may lack some of Harvey's sophistication, but she surpasses him as a communicator.
on May 13, 2007
This book makes a provocative argument: that the goal of neoliberal theory and practice is to restore wealth and power to a ruling elite. Unfortunately, I don't think it presents a strong enough case. It has a lot of footnotes and a long bibliography, but (i) many footnotes refer to an entire book, without any indication of where the fact can be found, (ii) many of the sources cited are secondary works from leftist authors or publishing houses, including the author's own works, and (iii) many purported facts, including material placed wthin quotes, are not sourced at all. While I was sympathetic to many of the author's points, I found myself constantly wondering about the reliability of his evidence.
Sadly, the tone fits the stereotype of leftists taking themselves too seriously; it's utterly humorless and at times PC-preachy. I wished the author could write (and cite) more like Thomas Franks, who's also left of center but fun to read. Nonetheless, the book has some very interesting bits, such as about the involvement of University of Chicago economists in advising the Pinochet regime, and the comparison between the Chilean reforms with those enacted by Paul Bremer in Iraq. You'll find some stimulating ideas if you can tolerate the book's unremittingly sober mood -- but maybe double-check the facts before you start quoting it.
PS: For historical background about the real motivations for creation of the Chicago School, see the essay by R. Van Horn and P. Mirowski, "The Road to a World Made Safe for Corporations: The Rise of the Chicago School of Economics", a draft of which (May 2005) is available online. While nowhere near as polemical as Harvey's book, this scholarly essay more tends to support Harvey's thesis than to undermine it. And it has the advantage of being based on primary source archival research in the papers of the participants, rather than on secondary sources by like-minded authors.
on April 3, 2011
David Harvey's book "A Brief History of Neoliberalism" is exactly that. It traces the origins of neoliberalism in the attempt of the capitalist class to reform itself and find a new class consciousness after the stagnation of the 1970s had ended the one great boom period of capitalist history (1950s-1970s). Neoliberalism is and was the project of destroying the power of organized labor and the social-democratic consensus in order to reconstitute the capitalist class as a power controlling and dominating all societies and the world. This is not a question of conspiracy, but a matter of the capitalists of different countries responding in similar ways to similar challenges to the accumulation of capital and the maintenance of their power over production and distribution; both the timing and the success of their endeavours vary by country and this is not to be assumed to be the product of some worldwide coordinated effort. But the policies and rhetoric in each case are largely the same, a combination of extreme liberalization and commodification with a strong emphasis on freedom in rhetoric and on authoritarian exercise of state power and nationalism in practice. This allows us to identify neoliberalism as one clear movement across the globe, from China to Chile and from the US to Sweden. It also allows us to identify neoconservatism, as it is called in America, as neoliberalism armed for conquest.
As David Harvey chronicles, far from actually increasing the freedom and wealth of all individuals, neoliberalism has failed to perform on all counts. It has devastated environments, destroyed the rights and position of labor, massively increased inequality and precariousness, led to an upsurge of crime and the 'informal economy', made many countries bankrupt while enriching the rich few in the Western world, and so forth. It has decreased our liberties by implementing ever more aggressive state postures against the inevitable backlash from the people, whether it is in the form of stringent anti-terrorism laws or the explosive increase in the proportion of the population that is imprisoned in the most neoliberal countries. It has shortened life expectancies and decreased social and health indicators. It has, moreover, failed even by its own test: worldwide growth rates have stagnated significantly in the period of neoliberalism compared to the semi-Keyenesian boom period after the war, with average worldwide annual growth rates declining from 3.5% pa to less than 1%. In fact, if it weren't for the reproletarianization and commodification of China, this worldwide growth might well be zero. So even by the standards of capital accumulation, it has not succeeded. David Harvey correctly emphasizes therefore that neoliberalism is not first and foremost a theory of economic policy, nor is it a philosophy like Hayek's; first and foremost it is using such policies and philosophies for the purpose of reconstituting and re-empowering the capitalist class, an ever smaller minority with ever greater wealth. It is for this reason above all that neoliberalism is a threat to the interests of the great majority everywhere in the world, and must always be defeated. Another world is possible.