A Brief History Of Neoliberalism

In Chapter 6, Harvey analyzes the effects of neoliberal policy on society, the environment, and human rights. He begins with an observation that the two largest economies since the 2001 economic recession, the United States and China, have engaged in Keynesian spending programs in the military and infrastructure, respectively. This points to a tension between sustaining capitalism, on the one hand, and the goals of the ruling class to maintain its power, on the other. He argues that historically the ruling class will pursue its self-interests even if it crashes the economy.

In the section “Neoliberal Achievements,” Harvey analyzes the extent to which neoliberalism has been successful at “stimulating capital accumulation” or generating wealth (154). He uses data to state that economic growth globally under neoliberal policies has been limited and that well-being has declined. Inflation has, however, been reduced. Harvey argues that the reason neoliberalism has remained so popular is because its uneven geographic development allows for pockets of wealth to be created and because it has strengthened or formed upper-class power. The persistence of poverty and inequality is explained as a failure of people to be sufficiently hard-working. Neoliberalism has created a growing financial industry that has captured wealth through speculation and trading financial instruments, including stocks. The information technology sector has also expanded.

Harvey argues that the largest achievement of neoliberal policy has been to “redistribute, rather than to generate, wealth and income” through a process of “accumulation by dispossession” (159). These processes take many forms, including the transformation of public property into private property. Harvey identifies the four main features of accumulation by dispossession as: 1) privatization and commodification; 2) financialization; 3) the management and manipulation of crises that allow wealthy lenders to extract money from impoverished borrowers; and, 4) state redistributions to the upper classes through mechanisms like the privatization of public housing, as in the United Kingdom under Thatcher. These state redistributions are also enacted through tax cuts for corporations and the wealthy. The state enforces accumulation by dispossession through policing and, in some cases, military actions against opposing forces.

In the section “The Commodification of Everything,” Harvey describes how neoliberal policy and its market focus turns everything into a commodity that can be exchanged for a price in a market governed by legal contracts. In this framework, commodification becomes a form of ethics that governs all human interactions. This extends to the commodification of land, labor, and money, even though, as Karl Polanyi argues, these are not true commodities. As just one example, labor is comprised of people, who have different skills and life experiences—they are not commodities but become “commodified” under neoliberalism and capitalist systems more broadly. Neoliberal policies reduce protections for workers and reduces the welfare state, which makes people’s lives increasingly unstable. Further, unlike capital, labor is not entirely geographically mobile; immigration restrictions create a pool of “illegal” migrant labor without protections who are forced to work in horrific conditions. Some workers benefit from the increased flexibility of neoliberal labor markets because it allows them greater autonomy, but many face precarity. As the state and other social institutions shrink, people turn to alternative forms of solidarity from gangs to cults to fundamentalist Christianity to survive and find support.

In the section “Environmental Degradations,” Harvey describes the impact of neoliberal policies on the environment. Neoliberalism privileges “short-term contractual logic” and therefore doesn’t consider long-term environmental harms (172). Since 1970, carbon emissions have increased, rainforests have been rapidly destroyed, and water sources are polluted. Biodiversity has collapsed around the world.

In the section “On Rights,” Harvey describes how even the opposition to neoliberal policies accepts through the use of the language of human rights neoliberalism’s fundamental emphasis on individual rights and freedoms. Rights are often ensured through the legal system with the support of non-governmental organizations (NGOs). Harvey describes NGOs as undemocratic and elitist because they are accountable to their boards and funders, not the people. Further, the fragmented nature of accumulation by dispossession requires a universal framework for collective action, that of rights. However, Harvey describes human rights as a “double-edged sword” that can also be used (178), for example, to justify military actions as in the US invasion of Iraq. Harvey notes that while abstract ideas like justice can have universal appeal, they are practically meaningless until they are applied.

Harvey then describes rights under neoliberalism. In the current system, states guarantee rights that result in stateless or “illegal” (undocumented) immigrants having fewer rights than other people. Neoliberalism particularly privileges individual rights and property rights. This rights framework requires endless capital growth through geographic expansion (sometimes facilitated by military violence) and privatization. Harvey argues that another set of rights should be privileged instead, such as the right to food or the right to organize unions.