By Quentin Choy
May 6, 2021
I recently completed David Harvey’s book, A Brief History of Neoliberalism published in 2005. Neoliberalism is such a pervasive force in our society that I thought it would be worth exploring its history and theoretical foundations. Some things worth mentioning before I review the book are both the context in which the book was written and some information about the author.
A Brief History of Neoliberalism was written during the first year of Bush’s second term as president, several years into the Iraq and Afghanistan Wars waged by the Bush administration. The Bush tax cuts of 2001and 2003 had been passed, and the 2008 financial crash was on the horizon.
The author, David Harvey is a critic of the Bush presidency, and much of this criticism is found throughout the book. While warranted, some of the book reads as a polemic against Bush, and Harvey’s continued and repeated criticism of Bush gets old whether you agree with the criticisms or not. David Harvey is a professor of Anthropology and Geography at the Graduate Center of the City University of New York (CUNY). Having taught Marx’ works for over 50 years, Harvey is a member of the political left, and much of what he says in the books makes his stances clear.
Not to be confused with modern political liberalism, neoliberalism is an ideology which focuses on increasing privatization and austerity measures, reducing government spending and deficits, and reducing regulation on the market and its industries. Neoliberalism is often associated with political figures such as Ronald Reagan and Margaret Thatcher and economists such as Milton Friedman and Ludwig von Mises.
While the book itself is titled A Brief History of Neoliberalism, the history that Harvey reviews of the ideology is indeed short. Harvey’s book is focused more on the history of neoliberalism’s implementation rather than its creation as an ideology. While he goes over the theoretical foundations of neoliberalism as an economic and political philosophy, he does it far too quickly.
However, when he goes over the implementation of neoliberalism and its consequences, he does an excellent job at thoroughly assessing its role in history. From Thatcher’s Britain to Reagan’s America, Harvey examined the role of neoliberalism in Reagan’s crackdown on Professional Air Traffic Controllers Organization strikers and Thatcher’s crackdown on workers unions and coal miners.
According to Harvey, neoliberalism was supposed to prevent the rise of anti-democratic forms of government as well as threats to the capitalist order following the Great Depression and World War II. While Roosevelt’s New Deal was a response to the Great Depression, so was Mussolini and Hitler’s fascism. Stalin’s communism to the east was another alternative. Neoliberalism was meant to guide the world back to democracy and capitalist society.
Following the end of World War II and the start of the Cold War with the Soviet Union, the need for large government spending like the New Deal following the Great Depression was unnecessary. The American economy was booming and thriving until the 1970s with increasing levels of inflation and low levels of production and economic growth. During the 1970s, people like Margaret Thatcher came to power and enacted neoliberal policies such as austerity programs, cuts in public spending, opposition to labor unions, and increased privatization of industries and services that were once public.
Many in Britain believed that Thatcher and Thatcherism were moving to quickly and lacked compassion for individuals within society who were being left behind by neoliberal policies. However, Thatcher sought to dissolve society in favor of individualism and personal responsibility. She also viewed the morality of Britain as a key factor in her policy enactments, saying “economics are the method, but the object is to change the soul.”
In America, Ronald Reagan’s election victory in 1980 marked the end of the New Deal era of large government spending and the arrival of the neoliberal era. If Thatcher’s method of enacting neoliberal policies was austerity, then Reagan’s method was deregulation. Reduction of government spending, tax cuts, and deregulation were all used to reduce inflation which had plagued the 1970s.
The book did a good job at not just analyzing neoliberalism’s rise in western societies like the United States and the United Kingdom but in seeing how it came to prominence across the world. Two particular places the book focused on were China and Latin America with emphasis on Chile and Mexico.
For the China section, Harvey focused on how China shifted from being a communist, Maoist society to one with a variation of neoliberalism in practice. Emphasis on privatization of former state-owned enterprises (SOEs) was made, which catalyzed China’s transition away from communism to one of the world’s largest export markets.
In terms of neoliberalism in Latin America, neoliberalism was typically enacted violently with Chile being the primary example. During the 1970s, Salvador Allende, a Marxist was democratically elected and held legitimacy with the Chilean people and had a mandate to install socialist policies. In September 1973, General Augusto Pinochet staged a U.S.-supported coup against Allende resulting in Allende’s death in the presidential palace. Pinochet and a military junta ruled over Chile, and many human rights abuses occurred with the imprisonment and killing of hundreds of people.
In power, Pinochet brought in the Chicago Boys as his economists, all of whom were inspired by Milton Friedman and were educated as a Cold War era counterforce to the left-wing economic policies in Latin America. Pinochet’s dictatorship silenced and put down any forms of dissent to the nation’s economic transformation away for Allende’s socialism toward Pinochet’s neoliberalism.
An important note that Harvey made about neoliberalism is that while it occurred in many places around the world, it was hardly ever forced upon anyone. The U.S. didn’t force China, Sweden, or India to become neoliberal. Many of these places adopted neoliberal policies on their own without any kind of force. This aspect of neoliberalism fascinated me because it shows how dominant it was as an ideology at a critical moment in history to many countries.
However, this lack of force that he characterizes neoliberalism with is refuted by Harvey’s mentioning of the Iraq War in which a main goal was to spread democracy to Iraq (supposedly). Harvey says that neoliberalism has also added a democratizing factor to it in which it seems to democratize nations around the world to bring rights and democratic government to its people. This democratizing aspect of neoliberalism is where force is used against people who might not want a democratic form of government and where things can get messy. Neoliberalism in this sense, shifts away from a strictly economic ideology to a global and political ideology.
After seeing the disgruntled public’s view of neoliberal policies, Harvey does an excellent job in predicting future political movements such as the Tea Party, the Occupy Wall Street Movement, and the rise of populist leaders such as Bernie Sanders and Donald Trump.
Overall, the book was very helpful in understanding the theory of neoliberalism and how it operates as well as how it came to be. He also includes some moving commentary about neoliberalism’s impact on the developing world and workers there. He also makes a point to argue for increased class politics rather than identity politics which seems like an early assessment of political culture in the 2010s and 2020s all the way back in 2005.
Despite Harvey’s seemingly unrelated tangents about the Bush administration, gerrymandering, and the religious right, the book draws a clear picture and draws a clear direction as to how neoliberalism came to dominate the world and its politics.
Image Courtesy of Audible.