A Brief History Of Neoliberalism

David Harvey uses a specific form of analysis that differs from mainstream political economic theory to ground his argument about transformations in the global economy between 1970 and the mid-2000s. Harvey is a leading scholar in Marxist geography, a field that uses Marxist economic theory to understand how territories and their populations are controlled, developed, and changed over time vis-à-vis political economy. To understand the kinds of arguments Harvey makes in A Brief History of Neoliberalism, it is helpful to know how Marxist political economy differs from the mainstream theories of political economy that he critiques.

Political economy is a field of study that describes and analyzes how economic systems are governed by political systems (and vice-versa). It relies on elements from the fields of economics, political science, and history. Marxism is a normative form of political economic analysis that developed out of the writings of the philosopher Karl Marx (1818-1883). Marxism views capitalism as a struggle between the upper classes (those who possess the means of production, called capitalists) and the working classes (those who are paid for their labor) for power and wealth. It critiques capitalism because capitalists exploit the working classes in order to earn profits. In other words, capitalists use the fact that the working class does not own the means of production to exploit the labor of the working class for the capitalists’ profits. Marxists believe that the workers should have more power in the economy and should not be exploited. Unlike mainstream economists, they are anti-capitalists. In A Brief History of Neoliberalism, Harvey returns frequently to his assessment of how the elite classes use neoliberal policy to improve their economic circumstances at the expense of the poor and working classes. One of the tools Marxists use to analyze political economy is historical materialism, which employs statistics and assessment of production methods to describe how economies and societies change over time. Therefore, Harvey frequently relies on charts and graphs consisting of various historical data to illustrate his arguments.

Harvey is critical of economists because they are pro-capitalist. In addition to critiquing neoliberalism throughout, he also critiques other forms of capitalism like Keynesianism and its political expression in embedded liberalism. Liberalism here denotes a political philosophy that privileges individual freedoms and equal rights guaranteed by a system of laws protected by the state (government); this usage of liberalism is not affiliated with the term liberal as in left-wing politics, and it is a political philosophy that scholars often link to capitalism, advocating for a liberal-capitalist political economy. Keynesianism is a theory articulated by economist John Maynard Keynes (pronounced [Kaynz]) in his text The General Theory of Employment, Interest and Money (1936). Keynes believed that governments should regulate the economy and spend money to spur demand and avoid economic slumps like the Great Depression. After World War II, this was the dominant political economic system in the United States and Europe. Harvey critiques Keynesianism because, although it provides more support to working classes than neoliberalism, it ultimately operates to patch over the problems of capitalism rather than address the core inequalities built into the capitalist system. Harvey critiques contemporary New Keynesian economist Joseph Stiglitz for similar reasons.