Neo-Liberalism

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Theorising contemporary society – Kate Nash

Lecture 2 Neo-liberalism, states and empire

Libyans on military intervention - YouTube|
| www.youtube.com/watch?v=-hcyUADP1zk|

Neo-liberalism
The basic facts of economic globalization aren’t disputed by anyone – they’re just interpreted differently.

Neo-liberalism is a project - began in the 1970s under General Pinochet in Chile, which was then energetically taken up by Thatcherites in the UK and Reaganites in the US to ‘roll back the state’ in favour of markets. Harvey – to escape the ‘rigidities’ of Keynesian corporatism – especially labour markets and flows of capital investment. Nationally Keynesianism involved agreements between states, corporations and workers that industries should be supported, subsidised where necessary, even owned by the state, that high wages and social provision should enable workers to stimulate manufacturing by high levels of consumption, and corporations were to accept high wages and high taxes in exchange for a stable context of economic growth. Internationally Keynesianism involved setting up the Bretton Woods institutions, the IMF and World Bank, which were to prevent currencies becoming devalued, so enabling economies to remain stable even when they ran temporary trade deficits. ie intended to strengthen national control over economies. Neo-liberal economic policies - enabled the rapid growth of speculation in financial instruments and the growth of border-crossing multinational corporations (MNCs) to take advantage of cheap labour (anti-union agreements, low wages and living standards etc). Given a boost by the end of state communism in 1989, which was widely seen as a historical triumph for free markets, and which resulted in neo-liberal policies being rolled out across Eastern Europe. At the same time, throughout the 1980s the IMF and World Bank, demanded the return of loans and imposed strict neo-liberal discipline on countries across Latin America and Africa, requiring ‘Structural Adjustment Programmes’ that were intended to free markets from state-led development, ending food subsidies, privatising state enterprises, and cutting back public spending on social programmes of education and health-care.

Neo-liberalism is a political project that is intended to produce a particularly dynamic global capitalism - ‘turbo-capitalism’ (John Keane – see reading list on ‘Global Civil Society’). Involves marketization of resources, goods and services that were previously outside private ownership eg aspects of welfare states like education, health-care and housing, and also nationalized industries eg virtual goods (like the new financial instruments made possible by the digital revolution); eg nature itself (by using commons such as the Amazon rainforest, or copywriting the human genome) into private ownership.

Nb capitalism and neo-liberalism are not the same thing – neo-liberalism is a project, to create global free markets. Capitalism is a system of economic exchange based on the private ownership of property and the free sale of labour. Social democrats call for a return to some form of Keynesianism ie greater control of states over national economies, especially in those that are most exposed to global capitalism eg fair not free markets, state investment in national industries and public services (‘drop the debt’ and aid) etc Nb not all states are neo-liberal in the same way:

China remains nominally communist, but since economic reforms after Mao’s death in the late 1970s, the Party has also adopted policies of privatization and marketization. Nevertheless, state investment in the economy is very high. Cf Singapore, S. Korea etc on which the Chinese model is loosely based (‘the Asian Tigers’): in 1980s investment was very highly directed by states, foreign investment was restricted, trade was protected, exports subsidised etc. Also early industrialising states, and Japan – protecting ‘infant...
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