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Neoliberalism co-opted the 1960s counter-culture, 6 Feb 2006
Margaret Thatcher, Ronald Reagan, Augusto Pinochet - these are the famous faces of neoliberalism, the economic (and, to some extent, philosophical) doctrine that advocates unregulated capitalism, free trade, small government (and hence low taxation) and the marketization of virtually every aspect of life. In this book, David Harvey does a good job of analysing the resurrection and rehabilitation of neoliberalism in the mid/late 1970s (with Paul Volocker at the US Federal Reserve Board, the International Monetary Fund (IMF), and Deng Xiaoping's acension to the leadership in China); and he brings it right up to today, as China steams ahead in economic expansion and outsourcing of jobs becomes an evermore noticable aspect of dislocation in 'the West'.
Essentially, Harvey's thesis is that neoliberalism is a form of class war: it involves a massive transfer of wealth from the developing/underdeveloped world to the developed world. When neoliberalism threatens ruling class power, Harvey argues, the rules of the game suddenly change: neoliberalism departs from classical liberal economic theory to safeguard ruling interests. An example includes the fact that the IMF intervened in the Russian currency crisis in 1997-8 to save Western investors from having to suffer bad debts: such intervention took the form of foisting painful 'restructuring' programmes on the Russian economy, which manifested itself in massive cuts in public expenditure (public employment, social welfare provision etc.). Under classical liberal economic theory, the investors should have suffered the bad debts, while the IMF should have helped the Russian government manage its currency difficulties without drastic cuts in public provision.
Harvey is good at tracing the way neoliberalism built up support (or, at least, tolerance) among the public. The concept of 'freedom' was the keystone, he argues. Neoliberals in governments, think tanks, universities etc. argued that freedom from outside interference was the greatest form of freedom. Hence, all forms of interference with the individual citizen (say, high taxation to finance a generous welfare state) were presented as illegitimate and tyrannical. Consequently, neoliberalism found a receptive audience in the individualistic generation that came of age in the 1960s: their various forms of 'rebellion' could be easily absorbed into the cool, ironic and self-reflexive capitalism that neoliberalism unleashed.(Thomas Frank has written a lot about this, the 'commodification of dissent'.)
Harvey ends by insisting that neoliberalism can be challenged: it is not invensible. Yet, I wish he devoted a little more space to discussing strategies that could be used in the battle to defeat it. Nevertheless, this is a good place to start on your journey towards creating a just and more democratic world.