Neoliberalism and neoliberalization

   The ideology of neoliberalism owes a lot to the cold war. ”Neoliberalism – as a political and utopian project–  has its origins in transnational discussions about socialism that could take place only within liminal spaces dominated by left-wing scholars and activists. Right-wing activists later appropriated these spaces and their knowledge about markets and planning for battles in their own countries” ( Bockman 2007:344). Neoliberalism was a response to a crisis within the Keynesian system of institutionalized liberalism in the west at the same time state communism was unraveling. “If the period of the cold war is over, it is perhaps less because one side has won than because the legitimation of each political discourse found itself fundamentally challenged by material developments themselves” (Buck-Morss 2002:39). Neoliberalism is an ideology; the term was coined by Alexander Rostow in 1932, developed by Walter Lippmann, Fredrik Hayek and Milton Friedman (Hartwich 2009) coalescing in the 1970s and 1980s as free market liberalism linked to right wing populism of traditional values, low taxes and individualism (Harvey 2005).

   Neoliberalism however, is less of a coherent general strategy than a series of tactical maneuvers crystallizing as the Washington Consensus in the early 1990s (Harvey: 2005). The Washington Consensus is “a systematic program of decreasing state involvement in the economy through trade liberalization, privatization and reduced public spending” (Onis and Senses 2003:2). Its features are clearly evident as outlined by Bourdieu even if neoliberalism was not the product of right wing activist interventions on a global scale as Bourdieu suggests (1998a, 1998b).The neoliberal project is both utopian and political; a theoretical project to reshape international capitalism or a political project to restore conditions for capital accumulation and class rule (Harvey: 2005:19) in the context of a uni-polar world system that emerged out of the collapse of the USSR and Keynesianism.

  Harvey traces the parallels between two September elevenths…Chile in 1973 and the invasion/occupation of Iraq following the collapse of the twin towers in 2001. Harvey notes that US military power was behind both these forced restructurings, at radically different times and places. Paul Bremer`s orders in Iraq under the auspices of the Coalition Provision Authority included privatization of state enterprises, full ownership rights for foreign firms, repatriation rights for these firms, banking open to foreign control, and elimination of all trade barriers (Harvey: 2005:6) This echoed state measures after the coup in Chile; the adoption of Milton Friedman’s theories in tandem with the IMF. Chile was the first test case for neoliberalism under the direction of the Chicago boys.

  Nik Theodore suggests we need to make a distinction between neoliberalism and neoliberalization (Brenner and Theodore; 2002a). Theodore finds that as an accumulation regime neoliberalization is path dependent, meaning that free market liberalization is not inevitable and the extent to which privatization, deregulation, de-unionization, paramilitary policing, and free trade regimes are implemented is dependent on the degree of resistance to these policies (Brenner and Theodore 2002a).

  Brenner and Theodore…“emphasize the contextual embeddedness of neoliberal restructuring projects insofar as they have been produced within national, regional, and local contexts defined by the legacies of inherited institutional frameworks, policy regimes, regulatory practices, and political struggles. An adequate understanding of actually existing neoliberalism must therefore explore the path-dependent, contextually specific interactions between inherited regulatory landscapes and emergent neoliberal, market-oriented restructuring projects at a broad range of geographical scales. These considerations lead to a conceptualization of contemporary neoliberalization processes as catalysts and expressions of an ongoing creative destruction of political-economic space at multiple geographical scales”… (Brenner and Theodore 2002a: 349)

  Theodore identifies three periods of neoliberalization in the US at the level of the nation-state: shock, roll back neoliberization and roll out neoliberalization. The first was the Volker shock during the Carter Administration, the roll back period occurred during the Reagan years while the roll out neoliberalization was characteristic of the Clinton years and beyond (Brenner and Theodore 2002a).

  One of the characteristics of neoliberalism is the recycling and repositioning of institutions to serve as a vehicle to create "restructuring generated crises" (Harvey 2005). Decision making has been bumped up to the transnational level and down to the local scale, replacing government with governance at several scales complete with quasi-private entities outside of direct electoral oversight with implications for analysis and/or political action(Brenner 2004; Brenner 2002a ;Brenner 2002b;Jessop 2000;Green and Huey 2005). Metropolitan areas are being reshaped to accommodate new demands and new functions in an increasingly fragmented polity (Hackworth 2007; Knox 1991).

  One common factor links all variants of neoliberalism: a political threat to elite rule (Harvey: 2005:15) requiring a strong response. Redistributive efforts have yielded results, massive social inequality and a concentration of wealth has resulted in a restoration of class power (Harvey: 2005:16). Neoliberalization as an ongoing process of creative destruction has not resolved the problem of long term capitalist growth, but has succeeded in reworking the institutional framework, cities or urban regions are central to this project. (Brenner and Theodore: 2002).

  Neoliberal restructuring was a response to a deepening crisis of the post war Keynesian order of “embedded liberalism” (Harvey: 2005:11) which delivered high rates of growth until the late 1960s. At the end of the 1960s, signs pointed to a crisis of accumulation, inflation and unemployment coexisting together. The Bretton Woods system collapsed, the gold standard was discarded and exchange rates were allowed to float (Harvey: 2005) paving the way for the emergence of a globalized economy.

references:

Bockman J (2007) “The origins of neoliberalism between Soviet socialism and Western capitalism: “A galaxy without borders’”. Theory and Society (36)343–371

Buck-Morss, S. (2000) “Dreamworld and catastrophe: the passing of mass utopia in East and West” Cambridge, MA: MIT Press.

Bourdieu, P (1998a) "Acts of Resistance: Against the Tyranny of the Market". New York: Free Press.

__________ (1998b)”The essence of neoliberalism” Jeremy J. Shapiro trans. Le Monde diplomatique. http://mondediplo.com/1998/12/08bourdieu
Last accessed August 2009

Brenner, N and Theodore, N (2002a) "Spaces of Neoliberalism: Urban Restructuring in North America and Western Europe". London: Blackwell.

_______________________ (2002b) "Cities and the geographies of `actually existing neoliberalism " Antipode (34) 349 – 379

Brenner, N (2004) "New State Spaces: Urban Governance and the Rescaling of Statehood "Oxford: Oxford University Press

Green B and Huey L (2005) “The Politics of Economic Restructuring: Class Antagonism and the Neo-liberal Agenda”. Critical Sociology (31) 639

Hackworth J (2007) "The Neoliberal City: Governance, Ideology and Development in American Urbanism" Ithaca, NY: Cornell University Press

Hartwich, O M (2009) Neoliberalism: The Genesis of a Political Swearword
The Centre for Independent Studies (CIS) Occasional Paper 114. http://www.cis.org.au/temp/op114_neoliberalism.pdf
last accessed August 2009

Harvey, D. (2005) "A Brief History of Neoliberalism". University of Chicago

Jessop B (2000) "The crisis of the national socio-temporal fix and the tendential ecological dominance of globalising capitalism" International Journal of Urban and Regional Research (24) 323 – 360

Knox, Paul. (1991) “The Restless Urban Landscape: Economic and Socio-cultural Change and the Transformation of Metropolitan Washington DC”. The Annals of the Association of American Geographers. 81(2) 181-209

Onis Z and Senses F (2003) “Rethinking the Emerging Post Washington Consensus: A Critical Appraisal” ERC Working Paper in Economics 3(09)
http://www.erc.metu.edu.tr/menu/series03/0309.pdf
last accessed September 17, 2009