A Brief History Of Neoliberalism

In Chapter 7, Harvey analyzes the concept of freedom and considers the future of neoliberalism. He begins with President Franklin D. Roosevelt’s address to Congress in 1935, which described “freedom from want” as an essential human right (183). He contrasts this with then-President Bush’s neoliberal concept of freedom that emphasizes a free market and a limited state. American political discourse privileges the latter understanding of freedom and does not consider others. However, neoliberal freedoms result in many people living in poverty and turning to crime to survive.

Harvey then briefly describes several movements that oppose neoliberalism, including the environmental movement and mutual support networks. There are religious anti-market sects, such as Wahabi Islam. There is also a growing political movement against neoliberalism, as seen in center-left government coalitions in Latin America and the increasing number of economists calling for modified Keynesianism. However, these forms of opposition will not be successful unless the state increases the provision of welfare and reduces the power of finance capitalists. He notes that under Bush, Keynesian-style redistributions have largely been upward, toward the wealthy.

In the section “The End of Neoliberalism?,” Harvey notes that the Keynesian policies of China and the United States suggest that neoliberalism might be facing challenges. Neoliberalism was borne out of the failures of embedded liberalism, and Harvey suggests neoconservatism’s response to the Crises Caused by Neoliberalism might be the next stage of development. The United States in 2006 was showing many signs of potential financial crises, including a massive budget deficit and currency depreciation. If the United States defaulted on its debts, it would cause a global financial downturn, and so lenders have continued to lend to the United States to avoid this. However, the Bush administration was unconcerned with this looming financial crisis. Harvey predicts that when such a crisis happens, the financial elite will ultimately benefit even if there is a period of instability and downsizing. Harvey considers the effects hyperinflation or deflation would have on the United States and the global economy. Under hyperinflation, the United States would lose its status as the global reserve currency. Under deflation, the US economy would shrink and could set China on the path to being the largest economy in the world. This could lead to military conflict between the superpowers. It would also further threaten US Social Security programs and property values.

Harvey argues that classic neoliberalism could be replaced by neoconservatism, which likewise supports free market systems paired with authoritarianism. American nationalism sees the United States as the greatest power in the world and exports American culture under the theory of its greatness. It also supposes that there are outside threats, such as terrorists, who seek to bring the United States down. Neoconservatives seek to maintain law and order policies domestically by using these international threats to implement authoritarian measures, such as the Patriot Act, which restricted civil liberties. Harvey argues that US power is waning internationally. As neoliberalism turns into something else, the United States can either accept new power dynamics peacefully or violently. Harvey believes it will take the more militant path, especially as opposition is “fragmented, rudderless, and lack coherent organization” (198).

In the section “Alternatives,” Harvey states that a synthesis of analytical and critical inquiry and already-existing oppositional movements is required to come up with alternatives to neoliberalism. One form of opposition is classic organized labor in the form of unions and workers’ political movements. He also cites the avant-garde Zapatista rebellion in Mexico as a form of more inclusionary politics outside of traditional party politics. There are many forms of organizing across civil society that are “embedded in the nitty-gritty of daily life and struggle” (200). However, these protest movements are often put down with violence by the state. Harvey briefly describes the variety of methods taken by oppositional movements including local practices to decouple from the neoliberal economy, political parties like the Workers Party in Brazil, or movements to dissolve the IMF, World Trade Organization, and World Bank. Harvey argues that oppositional movements should emphasize the class-struggle nature of the conflict against neoliberalism.

Harvey notes that opposition is split between movements against the poor treatment of workers and those against accumulation by dispossession. Harvey argues that these movements can be linked by creating solidarity against the elite class. Growing economic inequality also creates potential for encouraging more people to take a stand against neoliberalism. He argues that rights other than those to private property should be advocated for, such as a right to “control over production” (204). He notes that neoconservatives have staked out morality as an organizing principle, and he argues that oppositional movements should also fight on these “culture war” grounds, in the form of describing neoliberal economics as immoral. He argues that the focus of opposition should be on highlighting how anti- and un-democratic neoliberalism is, whether through state capture or undemocratic international institutions like the IMF or World Trade Organization. This could lead to a revitalization of democracy and a more robust form of freedom.