neoliberalism wiki

“The standard neoliberal policy package includes cutting back on taxes and government social spending; eliminating tariffs and other barriers to free trade; reducing regulations of labor markets, financial markets, and the environment; and focusing macroeconomic policies on controlling inflation rather than stimulating the growth of jobs,” reports economist Robert Pollin (2003).[7] Arising out of a rejection of the class compromises embedded in previous liberal political-economic policies, including Keynesian and Active Labor Market Policies (ALMPs), neoliberal theory, institutions, policies, and practices are not politically neutral.

Opponents critique neoliberalism’s effects on wages, working class institutions, inequality, social mobility, working class well-being, health, the environment, and democracy. Notable opponents to neoliberalism in theory or practice include economists Joseph Stiglitz, Amartya Sen, and Robert Pollin,[8] linguist Noam Chomsky[9], geographer David Harvey, [10] the anti-globalization movement, including ATTAC ((Association pour la Taxation des Transactions pour l’Aide aux Citoyens, or the Association for the Taxation of Financial Transactions for the Aid of Citizens, which began by agitating for the Tobin Tax on foreign exchange transactions) in Europe. The economists and policy analysts at the Canadian Centre for Policy Alternatives (CCPA) offer progressive policy alternatives to neoliberal policies. In addition, a significant opposition to neoliberalism has grown in Latin America, a target of neoliberal policies. Prominent Latin American opponents include the Zapatista rebellion, and the governments of Venezuela, and Cuba.

Workers in the U.S. readily observe some of the symptoms of their decreasing welfare. Not only have many core countries’ labor aristocracy families been forced to have more than one bread-winner, but workers have been so heavily disciplined by capital and the capitalist state that, as Alan Greenspan said, they are “traumatized”.[11] Daniel Brook’s “The Trap: Selling Out to Stay Afloat in Winner-Take-All America” (2007) describes the anti-democratic political effect of decreased middle class welfare.[12] The massive U.S. military-industrial complex adds an extra layer of repression to working class traumatization, according to David Harvey (2005), making resistance seem unfeasible to most workers. A traumatized working class allows the capitalist class absolute reign, which modern history (the laissez-faire economic crises of 1873 and the 1920s) shows to be disastrous for economies around the globe, states, and working class people, but which is on average only beneficial or harmless for capitalists.[13]

Sometimes neoliberalism is referred to as the “American Model”, characterized by low wages and high inequality.[14] Neoliberal policies have contributed to a U.S. economy in which 30% of workers earn low wages (less than two-thirds the median wage for full-time workers), and 35% of the labor force is underemployed; only 40% of the working age population in the U.S. is considered adequately employed, according to economists David R. Howell and Mamadou Diallo (2007). The Center for Economic Policy Research’s (CEPR) Dean Baker (2006) has shown that the driving force behind rising inequality in the United States has been a series of deliberate, neoliberal policy choices including anti-inflationary bias, anti-unionism, and profiteering in the health industry.[15] However, countries have applied neoliberal policies at varying levels of intensity; for example, the OECD has calculated that only 6% of Swedish workers are beset with low wages. John Schmitt and Ben Zipperer (2006) of the CEPR have analyzed the deleterious effects of intensive Anglo-American neoliberal policies in comparison to continental European neoliberalism, concluding “The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor-market flexibility dramatically improves labor-market outcomes…Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility” than all the continental European countries for which data is available.[16]

One of the most famous moments in neoliberal political history occurred when then-U.S. President Ronald Reagan’s advisors had him deregulate the thrift industry. This was promoted with the claim that a gigantic bonanza of growth and investment was sure to follow. Reagan signed the deregulation bill in 1982, grinning, “All in all, I think we’ve hit the jackpot.” The best reckoning is that deregulation bomb redistributed a trillion dollars from the public upward to capitalists’ private holdings.[17] While Reagan and the United Kingdom’s Margaret Thatcher laid the groundwork for working class traumatization through eliminating collective assets and giving away public assets to elites, destroying working class organizations like unions, and promoting insecurity, authoritarianism and militarization, less-flamboyantly anti-working class politicians have steadily continued the neoliberal tradition.

Neoliberalism under the U.S. Clinton administration–steered by Ayn Rand devotee Alan Greenspan and Robert Rubin– was the temporary and unstable policy inducement of economic growth via government-supported financial and housing market speculation, in conjunction with low unemployment and low inflation, made possible by the disorganization, disenfranchisement, and dispossession of the American working class.[18] Berkeley sociologist Angela Davis has argued and Princeton sociologist Bruce Western has shown that the astonishingly high rate of incarceration in the U.S. (1 out of every 37 American adults is in the prison system), heavily promoted by the Clinton administration, is the neoliberal U.S. policy tool for keeping unemployment statistics low, and stimulating economic growth through maintaining a contemporary slave population within the U.S. and promoting prison construction and militarized policing.[19]

Harvey (2005) sums up neoliberalism as a global capitalist class power restoration project. Neoliberalism, he writes, is a theory of political-economic practices that dedicates the state to championing private property rights, free markets, and free trade, while deregulating business and privatizing collective assets. Ideologically, neoliberals promote entrepreneurialism as the normative source of human happiness. Harvey also considers neoliberalization a form of capitalist “creative destruction”, a Schumpeterian concept.[20]

For Marxists, neoliberalism is a late-capitalist form of “primitive accumulation,” a collection of crisis-offloading and crisis-deferring mass strategies motivated by the conjuncture of the capitalist drive to appropriate social wealth and the inherent capitalist tendencies (overproduction/underconsumption, falling profit) to crisis. In the Marxist perspective, capitalism inherently tends to disruption and violence; so worker protest and insurrection is in effect coordinated disruption of automated disruption, to the end of replacing a a broadly disruptive and violent system with a more broadly-responsive social and environmental order.

Harvey observes that neoliberalism has become hegemonic world-wide, to a large extent by the constrained rationality imposed by capitalist incentives and culture, but also by extensive and intensive, and often violent, coercion. Opponents of neoliberalism argue that neoliberalism is the implementation of global capitalism through government/military interventionism to protect the interests of multinational corporations. Even neoliberal proponent Thomas Friedman has argued approvingly, “The hidden hand of the market will never work without a hidden fist.”[21] In its commitment to belligerent capitalism, neoliberalism is linked to neoconservatism.

Citations:

^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso: 196.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso.
^ Profit Over People: Neoliberalism and Global Order. Seven Stories Press. November, 1998. ISBN 1888363827
^ Harvey, David. 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso: 53.
^ Brooks, Daniel. 2007. The Trap: Selling Out to Stay Afloat in Winner-Take-All America. New York: Times Books.
^ Harvey 2005: 153
^ Howell, David r. and Mamadou Diallo. 2007. “Charting U.S. Economic Performance with Alternative Labor Market Indicators: The Importance of Accounting for Job Quality.” SCEPA Working Paper 2007-6.
^ Baker, Dean. 2006. “Increasing Inequality in the United States.” Post-autistic Economics Review 40.
^ Schmitt, John and Ben Zipperer. 2006. “Is the U.S. a Good Model for Reducing Social exclusion in Europe?” Post-autistic Economics Review 40.
^ Conason, Joe. 2004. “Reagan without Sentimentality.” Salon.com, June 8. http://dir.salon.com/story/opinion/conason/2004/06/08/reagan/index.html.
^ Pollin, Robert. 2003. Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity. New York: Verso.
^ Western, Bruce. 2006. Punishment and Inequality in America. New York: Russell Sage Foundation.
^ Harvey, David. 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press: 2-3.
^ Friedman, Thomas. 2000. The Lexus and the Olive Tree. Anchor Press.

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