BY DAVID HARVEY

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A Brief History of NEOLIBERLISM

• BY DAVID HARVEY

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Two tales of Neoliberalism
In the United States
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Two Tales of Neoliberalism
In India
Police brutality against workers strike at Honda
car plant, Gurgaon
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Malls of the few, chawls of the many P. Sainath
(2005) The scenes from Gurgaon gave us more than
just a picture of one labour protest, police
brutality or corporate tyranny. It presented us a
microcosm of the new and old Indias. Different
rules and realities for different classes of
society. The Haryana police lived up to their
history Gurgaon was about the police and
administration increasingly acting as enforcement
agents of big corporations. Not without precedent
in the past. But more and more a symbol of the
new India The streets of Gurgaon gave us a
glimpse of something larger than a single
protest. Bigger than a portrait of the Haryana
police. Greater than Honda. Far more complex than
the "image of India" as an investment
destination. It presented us a microcosm of the
new and old Indias. Of private cities and gated
communities. Of different realities for different
classes of society. Of ever-growing inequality.
Of the malls of the few and the chawls of the
many.
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What is neoliberalism?

• Economically Restoration/ constitution of class
  power
• Ideologically a theoretical doctrine that
  proposes that human well-being can best be
  advanced by liberating individual entrepreneurial
  freedoms and skills within an institutional
  framework characterized by strong private
  property rights, free markets and free trade
  Uses concepts of human dignity and individual
  freedom to appeal to broadly to a wide variety of
  constituents, becoming a common sense discourse
• Politically The neoliberal state should
  persistently seek out internal reorganizations
  and new institutional arrangements that improve
  its competitive position as an entity vis-à-vis
  other states in the global market
• Historically Comes to fruition in late-1970s/
  early-1980s to replace post-WWII political
  economy of embedded liberalism in the West
  gains traction through rise of information
  technology, fall of Soviet Union, globalization
  of investment and trade

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Crisis in capital accumulation
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By mid-1970s, discontent was widespread. There
was a clear political threat to economic elites
and ruling classes everywhere. In post-WWII
settlement upper class economic power was
restrained as redistribution of wealth accorded
to labor a much larger share of economic pie than
previously.
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Redistributive effects and increasing social
inequality have in fact been such a persistent
feature of neoliberalization as to be regarded as
structural to the whole project.
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Inequality
After the implementation of neoliberal policies
in the late 1970s , the share of national income
in the top 1 percent of income earners in the US
soared, to reach 15 percent by the end of the
century (close to pre-WWII share). The top .1
of income earners in the US increased their share
of the national income from 2 percent in 1978 to
6 percent by 1999, while the ratio of the median
compensation of workers to the salaries of CEOs
increased from just over 30 to 1 in 1970 to
nearly 500 to 1 by 2000With the Bush
administration's tax reforms taking effect, the
concentration of income and wealth in the upper
echelons of society is continuing apace because
the estate tax (a tax on wealth) is being phased
out and taxation on income from investments and
capital gains is being diminished, while taxation
on wages and salaries is maintained.
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Class Power Increasing productivity, stagnant
real wages (adjusted for inflation)
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Class Power Decreasing taxes on wealthy
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Neoliberalization has not been very effective in
revitalizing global capital accumulation, but it
has succeeded remarkably well in restoring, or in
some instances (as in China and India) creating,
the power of an economic elite.
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Key Terms
-Fordism/ Post-Fordism (flexible labor/ flexible
accumulations) -Supply-side economics (lower
corporate taxes, creating business
environments, de-regulation of business and
investment -Embedded liberalism post-WWII
political economy that features social
redistribution through public investments in
health, education, infrastructure, as well as
social security and safety nets compromise
between capital and labor (creation of broad
middle class of homeowners and consumer-citizens)
-Neoliberal theory cutting government spending
(mostly on social expenditures), decreasing taxes
and regulation on capital but not labor, free
trade and investment, market-logic pervades
everyday life -Reaganism/Thaterism neoliberal
turn in US and Britain in the 1980s (crushing of
labor, reduction in social welfare state,
privatization of state industries, decreased tax
rate on wealthy and business), de-industrializatio
n and capital flight to emerging markets
abroad shift from industry to financial services
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Globalization and Financialization
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Neoliberalization has meant, in short, the
financialization of everything. This deepened
the hold of finance over all other areas of the
economy, as well as over the state apparatus and,
as Randy Martin points out, daily life. It has
also introduced an accelerating volatility into
global exchange relations. There was
unquestionably a power shift away from production
to the world of finance. Gains in manufacturing
capacity no longer necessarily meant rising per
capita incomes, but concentration on financial
services certainly did In the conflict between
Main Street and Wall Street, the latter was to be
favored. The real possibility arises that while
Wall Street does well the rest of the US (As well
as the rest of the world) does badly.
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Contradictions of Neoliberalism

• - Exceptions to neoliberalism (protectionism,
  state intervention, central bank)
• - Neoliberalism as exception (free-trade zones,
  tax-exemptions, labor de-regulation)
• Golden Straightjacket of Global Financial
  System
• Electronic Herd of global financiers
• Too big to fail (73) vs. personal
  responsibility
• Hatred of democracy bypassing of democratic
  politics and representation to enact neoliberal
  economic policies
• Neolibearlism and nationalism (85)